Trade body Pensions UK has called on the government to set out a clear timetable for increasing automatic enrolment pension contributions after its research found strong public concern about under-saving.
Four out of five, 82%, of people see under-saving for retirement as a big issue, while 57% are not confident they are saving enough to maintain their standard of living in retirement.
The research showed clear signs of employer support for increased minimum automatic enrolment contributions, provided changes are introduced gradually, Pensions UK said.
More than 70% of small and medium-sized employers support increases to minimum auto enrolment contributions when they are phased in and businesses have two years to prepare.
In a separate survey of employers carried out by Yonder for Pensions UK, more than 70% of employers of small (71%) and medium sized (79%) businesses (10-249 employees) support increases, providing businesses are given two years to prepare (79%), and increases are phased (80%).
Among all size of business support increases from 33% to 52% if given two years notice or if it is phased in, with only around one in 10 opposing.
Those who seek to defer auto enrolment increases often argue that costs on employers would be too great in the current economic environment. However, these findings suggest this opposition may overstate the attitudes of employers.
Support was particularly strong among small and medium-sized employers, with opposition concentrated among micro-employers.
Pensions UK has argued that minimum contributions should rise gradually from 8% to 12% of qualifying earnings overall, split evenly between employers and employees, with the final position reached by 2035.
It said increases should be phased, predictable and supported by a clear roadmap, so that employers can plan ahead and workers can benefit from higher saving without sudden pressure on household budgets.
Zoe Alexander, chief policy officer at Pensions UK, said: “With the Second Pensions Commission finalising the package of proposals that will form its final report due next Spring, we are approaching crunch time for political decision making on pensions adequacy.
“Increasing automatic enrolment contributions to 12%, shared equally between employers and employees, is the right decision to deliver long term household financial security, something this Government has said it cares deeply about.”
She said now is the time to set a timetable and warned that delaying reform risks consigning future generations to low retirement incomes and benefit dependency.
She added: “A gradual, predictable roadmap would give employers the certainty they need, help savers adjust, and build the consensus needed for a fairer and more adequate pensions system. If we want to deliver long term household financial security, standing still is not a neutral option.”
• Consumer research was conducted on behalf of Pensions UK by Yonder Consulting among 1,623 adults who were not retired on 1 to 2 July.
• SME research was conducted on behalf of Pensions UK by Yonder Consulting among 251 employers with between one and 249 employees on 1 to 7 July. A total of 241 interviews were carried out, 84 with micros (1-9 employees), 84 with small employers (10-49 employees) and 83 with medium employers (50-249 employees).