As many will be aware, the DWP are about to launch an advertising campaign around the benefits of Auto Enrolment (AE). This is clearly a good idea, but a news-wire that has just landed in my inbox does leaves me slightly concerned about the possible approach being taken in these adverts.
The article can be viewed here: https://www.moneymarketing.co.uk/1058002.article?cmpid=MME01&cmptype=newsletter&email=true&ern=BC39CDA42EA78C0D39A15340CF0DB198
If the adverts reflect the Minister’s approach reported above (i.e. ‘it’s a pay-rise’), then it’s possible that these could be viewed rather negatively after the event.
It’s certainly true that the employee will only see the benefit of the employer’s contribution if they stay in the pension scheme. But this contribution is to a pension scheme and not the employees take-home pay. Add to this that the employee is also likely to be contributing to the scheme as well, and you will see that the pay rise argument might look just a little dicey.
True, the employee will have a pension at retirement, and the support of his or her employer in saving for this (both good and important things), but the employee will actually have less take home pay at the end of the month right now. It’s one thing for an individual employer, or the pensions industry, to present such an idea as a pay rise, but possibly quite another for a Government to do so given that this could leave the door ajar for a later political attack.
But let’s hope not. It will be interesting to see what the final adverts actually do say, and let’s hope they concentrate on the benefits of having a company supported retirement plan. Whatever the approach, more publicity can only be a good thing in tackling the UK savings gap.
Best regards
Steve
Recent Comments