Everton Football Club’s head of tax has urged employers to continue making pension contributions if members opt out during the cost-of-living crisis, saying employers should not save money through people’s hardship.  

 

There is “no reason that the employer should benefit because an employee is going through hard times”, said Everton FC’s Alison Haynes, speaking on a panel about the cost-of-living crisis at the Trades Union Congress’s annual pensions conference on Wednesday.  

 

The various functions within employers that come into contact with pensions – human resources, finance and those responsible for remuneration – should speak more to each other, the tax director of the club, which has 621 staff aside from footballers, added. Many do not understand that finance teams budget for pension contributions on total payroll, she explained: “If you budgeted for it, it’s already effectively spent, so you might as well pay it.” 

 

 

Haynes also believes those within employers need to be educated about pensions, as many of them do not know that auto-enrolment minimum contributions are widely considered insufficient for a decent retirement. 

 

As well as continuing employer contributions after an employee has opted out, Haynes urged companies to ask themselves every year whether they can increase their pension contributions. This is something that “all employers should challenge themselves with every year", she said, even if it is just half a percentage point. 

 

She also wants scheme sponsors to consider if they need more than one pension scheme if they only run a salary sacrifice scheme. 

 

“Is [the salary sacrifice scheme] fit for everyone or do you need both a salary sacrifice and a net pay arrangement for those who don’t pay tax?” she said.  

 

People whose income falls below the income tax threshold do not currently benefit from a tax bonus if they are enrolled in a salary sacrifice scheme. Last year, the government agreed to fix this so-called ‘net pay anomaly’ by paying a bonus to those not currently benefitting from tax relief “so far as is reasonably practicable”, but first payments are only due to be made from April 2025. 

 

    

 

It is not just employers that could do more voluntarily to support pension saving in the cost-of-living crisis.  

 

Alyshia Harrington-Clark, head of DC, master trusts and lifetime savings at the Pensions and Lifetime Savings Association, said there is a genuine question about how auto-enrolment can be optimised, “including things like continuing employer contributions regardless of what the employee does” and “matching temporary opt-downs".  

 

She suggested auto-enrolment does not work well for people like lower earners or who work part-time, and that those workers in particular often fall into demographics with protected characteristics. The government has committed to reforming auto-enrolment in the ‘mid-2020s' but has so far not produced relevant legislation. The reforms it agreed to do not include higher contributions or continuing contributions when an employee opts out or down. 

 

“Engagement can make a difference, but communications can only go so far. Maybe we [need to] look at the actual system to optimise it for some groups,” Harrington-Clark added. 

 

Pension schemes can support the work of employers and the government, she added. “What schemes can do is bridge the gap, just muck in,” she said.