Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Auto-enrolmentLatest NewsEconomics, government & businessDepartment for Work and PensionsPay & benefits

Auto-enrolment ‘will lead to cuts in pensions’

by Helen Gilbert 1 Sep 2011
by Helen Gilbert 1 Sep 2011

The Department for Work and Pensions (DWP) has defended its pensions auto-enrolment plans following a report that suggests firms will cut workers’ pensions when the new rules come into force next year.

A survey of firms by the Association of Consulting Actuaries (ACA) found that one organisation in four plans to cut its workers’ pensions when the rules change in October 2012.

The report revealed that just over a quarter of employers have budgeted for the cost of auto-enrolment, but 27% admit that they are looking to “review their existing pension scheme benefits to mitigate the cost of higher scheme membership”.

Meanwhile, smaller employers are expecting 35% to 40% of employees to opt out of workplace pensions following auto-enrolment.

ACA chairman Stuart Southall said that the results pointed to a rising trend among employers of all sizes to review existing pension arrangements and, given the economic climate, a number are seeking ways to reduce their pension costs.

“As things stand, there is a clear danger of more ‘levelling-down’ – a trend which our surveys have identified for some years now,” Southall said. “With contribution rates into many schemes failing to keep pace with the pension costs of longer lifespans, and with employers expecting – and in some cases relying upon – high anticipated levels of pension opting-out for budgetary purposes to keep their auto-enrolment costs down, warning bells are ringing.”

At present, around 38% of UK private sector employers provide a workplace pension scheme, but all will be required to auto-enrol their employees into a “qualifying workplace pension scheme” between late 2012 and early 2016 under the Government’s pension reforms.

In response to the report, a DWP spokesperson defended the plans, saying: “Automatic enrolment from 2012 will give millions of people the opportunity to save into a pension with a contribution from their employer.”

“We are bringing in the reforms gradually precisely to help businesses adjust to the change and are introducing measures including a three-month waiting period to save companies £170 million each year.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

“However, only one in three workers in the private sector is contributing to a workplace pension and our research indicates that 94% of employers say they will maintain or increase their contribution levels. It also shows that the majority of employees say they’ll continue saving once enrolled and for those who do opt out they will be automatically enrolled again every three years.”

For more information on pensions and auto-enrolment, see XpertHR’s range of information and resources on the topic.

Helen Gilbert

previous post
Acas launches social media guide for employers
next post
Average age discrimination award rises by £20,000

You may also like

Supporting employees through substance abuse

24 Jun 2025

Amazon invests £40bn in UK creating thousands of...

24 Jun 2025

Level 7 apprenticeship funding cuts to cost employers...

23 Jun 2025

Skills receive £1.2bn boost in new industrial strategy

23 Jun 2025

Low-paid could receive ‘Britannia’ dividend under Reform’s non-dom...

23 Jun 2025

Man who used company credit card for himself...

23 Jun 2025

UK engineering and manufacturing firms face hiring struggles

23 Jun 2025

Empowering working parents and productivity during the summer...

23 Jun 2025

How smarter collaboration can eliminate the workplace productivity...

23 Jun 2025

Aldi to hire for 1,000 new supermarket roles

23 Jun 2025

  • Empowering working parents and productivity during the summer holidays SPONSORED | Businesses play a...Read more
  • AI is here. Your workforce should be ready. SPONSORED | From content creation...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+