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Firms back auto-enrolment, UK government says

UK - The government says companies support auto-enrolment into personal pension accounts with auto enrolment.

The findings came in a study carried out ahead of a white paper on the issue to be issued in December.

However, larger companies said that employer contributions should exceed the proposed 3% - and Pensions Minister James Purnell agrees.

In a white paper in May the Turner commission had suggested the introduction of personal accounts with automatic enrolment.

"We can not carry on with the voluntary approach to private pension savings," Purnell told the Pension Liabilities Strategies conference in London today.

"It has only worked for a small group of people. Currently, seven million people in the UK are under-saving."

Under the new proposals, employees will be automatically enrolled into either the employers' pension scheme or a new national scheme unless they specifically sign an agreement to opt out.

According to the government survey among 2,500 private sector employers, 60% were in favour of automatic enrolment. The percentage divides up into 59% among smaller companies (under 50 employees) and 81% among large companies (250 or more employees).

Asked whether a phase-in on automatic enrolment making it initially only applicable to new employees, only 45% of employers thought this would be helpful, although 71% of very small companies (under five employees) said it would be a good idea.

The full 200 page report can be found on the Department for Work and Pension website under

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