Staff not claiming a stake in their future

The study, by Lloyds TSB Business, revealed that although 46 per cent of firms offering stakeholder pensions have set up schemes with employer contributions, take-up among staff has been sluggish.

The research found a strong desire among many employers to provide pension plans to staff, with a fifth of businesses not required to offer stakeholder pensions doing so voluntarily to help loyal workers in retirement.

The apparent willingness of companies to provide for their staff follows research that revealed that many employers were failing to offer stakeholder pensions to their workers, despite the fact the law demands that schemes are offered by firms with five or more employees.

However, the widely-anticipated ‘pensions timebomb’ is still expected to explode, with none of the employers quizzed thinking that most people will have adequate income on retirement in ten years’ time.

The government has attempted to avert the pensions crisis by proposing that the retirement age should be extended to 70 and that employees should be offered incentives to work later in life.

Ministers are also contemplating making retirement funds compulsory for employers, ensuring that workers get pay-outs even if their firms go bust. Business groups have strongly opposed the idea.

Stephen Pegge, of Lloyds TSB Business, said that more needed to be done to encourage employers and employees to take part in pension schemes.

“Most business owners feel that a contributory pension scheme offers important benefits for employees and believe that the individual has a joint responsibility with the State for pension provision.

“But many firms fear the amount of regulation involved and perceive the stakeholder system as complex, bureaucratic and, crucially, with limited tax advantages.

“Recent market uncertainty appears to have added to the general lack of confidence. More than ever this suggests that firms need good information and advice,” he said.