Pension auto enrolment – it’s a true double edged sword. If you’re an employee the fact that you will now be automatically enrolled in to your small/medium employers’ (<30 staff) pension scheme as of the beginning of this year, I think, is brilliant – something that many people avoid doing these days thinking it’s an unnecessary cost but in fact the impact of everyone in the UK doing this and then expecting to be given money to live on when they eventually hit whatever retirement age it will finally be is absolutely huge.
However, looking from an employers’ view it is an additional cost to the business, and potentially quite a heavy one depending on your size of business, one that could put pressure on other areas of the business, put pressure on businesses that are wobbly on their foundations and could be a complete headache to manage and maintain.
It’s used to be a nice perk to offer potential employees to sway them to join you, now everyone has to do it so you have to think of something else that hopefully won’t cost you much but will be a significant ‘hook’ for the potentially employable candidates.
Even worse there is talk of a pensions overhaul from the government on the horizon anyway, so why go to the bother of putting this one in place now anyway?!
I was taught by my Dad from a very early age to always pay in to a pension and in fact I have 4 different ‘pots’ now due to a private one I set up when the businesses I worked in were too small to offer a pension in with ‘the package’ plus the corporate ones I jumped in to partly because they paid in more than I did, surely that’s got to be a good thing?
I recently had a delve through all my pensions to work out roughly how much they were worth etc. and I now know that all being well when the time comes I will should have just enough to keep me going each month, but I certainly won’t be going on any cruises with it, that’s for sure!
So it brought to mind that if that’s my situation then what about others (some of whom I know!) who haven’t squirrelled away through pension schemes or had the support of their employers? Surely at the end of their working life the cost potentially to our economy could be massive, on top of an ageing population and the costs of living continuing to rise?
In my opinion, yes the current scheme could be a headache and may get changed yet again in the future, but we surely can’t afford to steer away from welcoming people in to small/medium business pension schemes given what it could predict in the future.
If our small and medium businesses are growing and reshaping our economy, then they also need to step up and support that community too, don’t they?