24/08/03

New research today reveals that 82% of employer-sponsored stakeholder pension schemes remain ‘empty boxes’ with no pensions yet active. The ABI is calling for more action to help employers to promote pensions take-up.

Stakeholder pensions – time for change, the third detailed ABI market analysis of the stakeholder pensions market, shows that:

1.5m stakeholder pensions have been sold since April 2001;
350,000 employers have designated a scheme – but 82% remain empty boxes with no members; and
only 13% of employer-based schemes have employer contributions.

Commenting on these results, Mary Francis Director, General of the ABI said:

“Stakeholder pensions have so far fallen short of expectations. We must need more action now to ensure that people use them to start saving for a decent retirement.

“We know that active employer involvement in pensions works*. That’s why we’re recommending a programme of employer action to boost pension take-up, to be taken forward in partnership by Government, employers, unions and the pensions industry.”

The ABI proposes a 5-point Employer Action Plan to be taken up by the Government’s new Employer Taskforce, headed by Peter Davis:

a Government-led programme to encourage employers to promote the schemes they sponsor;
permitting employers to promote the schemes they sponsor, eg by exempting them from the Financial Promotions Order;
helping employers meet the costs of advice through a Workplace Advice Tax Credit;
giving practical help to employers via the Government’s proposed Employer Information Pack;
requiring employers to do more – eg requiring them to give each employee a leaflet about the scheme they sponsor.

Mary Francis continued:

“Pensions are inextricably linked to the workplace. Our proposals will involve employers and help them help their workers.”

Provided by the ABI