LONDON: The CBI employers’ group surveyed 160 businesses employing more than half a million people and found that eight of out 10 executives think the government should stop making changes to the pensions regime, after complex reforms.
Business leaders are also concerned staff may stop saving for their retirement if tax benefits continue to be eroded as pensions become more complicated, the CBI found.
“Recent regulatory changes, coupled with auto-enrolment and state pension reform, mean UK business leaders now crave stability,” said Neil Carberry, the CBI’s director of employment and skills.
“Businesses want to focus on ensuring employees are making the most of what’s on offer, but there is clear concern about regulatory changes eroding incentives to save, which must be avoided at all costs.”
Recent big changes to the pensions regime include the requirement for employees to be automatically enrolled in company pension schemes instead of being able to opt out, a policy introduced by the coalition government. This is being extended to companies with fewer than 30 employees, as well as people with household staff.
Pension freedoms are also creating a human resources burden, the CBI said, as company leaders try to ensure their older staff do not spend their pension pots early and face hanging on to their jobs when they should have retired.
“Even at this early stage it is clear that succession planning is likely to become more difficult,” the CBI said. “The challenge the pensions freedoms brings for businesses is that employees risk not being able to afford to retire if they choose to spend a significant chunk of their pension pot on reaching 55 years of age while remaining in their jobs.”
