NEST research reveals employer plans for automatic enrolment
NEST is today (Friday 18 May) releasing top line results from its independent research among UK employers to understand their readiness and plans for automatic enrolment, as well as their attitudes to NEST. These results focus primarily on employers in the first six to nine months of staging, although we've also included some early results from other groups.
NEST conducts regular independent research among UK employers to understand their readiness for automatic enrolment and attitudes to NEST. We will publish more data from this research at the end of the year, showing trends where available.
This round of research shows:
Readiness for automatic enrolment
- Around half (54 per cent) of the UK's largest employers (5000+ workers) say they have confirmed their provider(s) for automatic enrolment. A further 34 per cent have a ‘good idea' of the provision they’ll put in place, with only 11 per cent saying they’re still at early stages.
- Similarly, around half (48 per cent) of medium-sized employers (1000 to 4999 workers) say they have confirmed their provider(s) for automatic enrolment. A further 35 per cent have a ‘good idea’ of the provision they'll put in place, with only 16 per cent saying they're still at early stages.
- When choosing a pension provider, the majority of employers (of all sizes) consider ease of day-to-day administration and clear communications to be factors that are ‘very important’ or 'of utmost importance'
Implementing automatic enrolment – support from the industry
- Employers expect the pensions industry to support them through the process of automatic enrolment. Around half (55 per cent) of employers with more than 1,000 workers say they expect to receive a lot of help from pension providers.
- As employer size decreases, they're more likely to expect the most support from their adviser. 34 per cent of employers with 5000+ workers, compared to 50 per cent of employers with 1000 to 4,999 workers and 58 per cent of employers with 100 to 999 workers, expect most support from their advisers.
Awareness of NEST
- Awareness of NEST is almost universal among the largest employers (97 per cent).
- Around half of 5000+ employers specifically recognise a number of benefits of the scheme. 55 per cent of these agree NEST can aid understanding by clear communications. 48 per cent agree NEST could help ensure workers like theirs have access to a good pension scheme, 46 per cent recognise the fact they don't have to deal with ex-workers and 47 per cent agree NEST feels fresh and modern.
- 88 per cent of employers with between 1,000 to 4,999 workers are aware of NEST but those with positive views are less likely than the 5000+ employers to mention specific features of NEST when asked. They tend to give more generic reform-related reasons, suggesting they're less engaged with the detail than those with staging dates during the first six months of automatic enrolment.
- EBCs in the main say positive things about NEST, suggesting it is well thought out, well designed and suitable for the people it is aimed at.
Likely uses of NEST by large employers
- Approximately one fifth (21 per cent) of large employers in the private and not-for-profit sectors say they are 'quite likely' or 'very likely' to use NEST for some groups of workers, with around 16 per cent of employers undecided. The majority of these large employers said they would use NEST alongside another scheme.
NEST Chief Executive, Tim Jones, says:
'These results suggest that many employers in the first year of staging are starting to get their plans in place, and awareness of NEST is high in this group. That’s really encouraging – employers really do need to give themselves time to get this right and they should know where NEST fits in.'
'Employers have also told us that they expect to get help from their providers and advisers. Providers and advisers obviously have a critical role to play in helping employers to understand what roles different schemes can play and how to implement automatic enrolment to suit the needs of their workers.'
'Large employers who say they are likely to use NEST report that it is likely to be used alongside existing provision. That's one of the roles NEST is intended to play – complementing existing schemes. We are already working closely alongside many of the existing private pension providers and expect that to continue.'
NEST conducts regular independent research amongst UK employers and their advisers. For this round of research, 707 pension decision makers were interviewed between 20 February and 28 March 2012. Interviews were conducted with employers with five or more UK employees. 125 IFAs and 20 EBCs who advise corporate pension clients were also interviewed.
Our researchers spoke to a larger proportion of large employers than would be usual in a general survey of UK firms because we wanted to ensure we collected robust and detailed data from this group. This means that large organisations were over-sampled relative to smaller organisations since they are scarcer. 94 interviews were conducted with 5,000+ employers, 146 with 1000 to 4,999 employers. Employer results are weighted to the known population for each employer size band to ensure they are representative.
Notes to Editors:
Key facts about NEST and where we fit in
- From October this year, the Government is introducing reforms that mean employers will have to enrol most of their workers into a workplace pension scheme that meets or exceeds certain standards. They'll also need to make a minimum contribution for many of these workers.
- NEST is a national defined contribution workplace pension scheme available to all employers to use to meet their new duties. It is designed around the needs of people who are largely new to pension saving, with clear communications, low charges and easy online tools and services. It is run as a trust-based scheme, on a not-for-profit basis, and has a legal duty to act in its members' interests.
- NEST has a public service obligation to accept any employer (whatever their size) who wants to use the scheme to meet their duties, as a sole scheme or alongside other provision.