SMES and Stakeholder Pensions

More than half (52 per cent) of SMEs (small-to-medium-sized enterprises) with under 50 employees in Great Britain have not informed their employees of the opportunity to invest in a stakeholder pension, according to the findings of a recent study from Taylor Nelson Sofres' (TNS') Business Line.


The research reveals that only three quarters (76 per cent) of SMEs with 5 - 49 staff have told employees about investing in a stakeholder pension, even though businesses with five employees or more and which are not exempt from providing access to a stakeholder scheme were legally obliged to do so by 5 October 2001. Amongst those SMEs with under five employees, just over a quarter (27 per cent) of employers had told their staff about stakeholder pension schemes.

The findings also show that employee interest in stakeholder pensions continues to be low. Amongst those SMEs which had informed their staff, six out of ten (59 per cent) said none of their employees had taken up the opportunity to invest.

Almost half (48 per cent) of employers who have informed employees, had no reaction from their staff. A further 10 per cent of those employees informed of the opportunity to invest in a stakeholder pensions believed it to be a 'bad' or 'very bad' idea.

Jack Murray, Director of TNS Finance and Business Services, said 'The take-up of stakeholder pensions amongst SME employees is clearly not proving as popular as the Government envisaged. At the same time, it would appear that employers could be doing more to make their staff aware of pension schemes and to encourage them to participate in the process of choosing a scheme for their company, as a significant proportion of informed employees have demonstrated no interest in the concept. Either stakeholder pensions are simply not attractive enough to many employees or not enough has been done to raise awareness of the financial difficulties which will be faced by many of those who make no provision for their retirement, other than the State pension.'

Research was undertaken by Taylor Nelson Sofres Business Line in the second quarter of 2002 amongst 1,011 businesses in Britain with fewer than 50 employees. Business Line is a quarterly small business omnibus survey which interviews key decision-makers in small-and medium-sized enterprises.

All articles 2006-22 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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