More than four out of 10 small firms are waiting until the last minute to sign up their employees to an auto enrolment pension scheme, research shows…
A study by financial advisory firm Wealthcare found 43 per cent of companies which registered through its AE on a Plate online platform did so less than a month before their deadline, or staging date.
Wealthcare’s research found 12.5 per cent missed their deadline altogether, signing up after their staging date had passed.
Auto enrolment is a government initiative designed to encourage people to save for their retirement through a pension scheme at work.
Firms which fail to comply with their auto enrolment responsibilities risk being fined by The Pensions Regulator. Up to December 2016, the regulator had issued 31,680 compliance notices and 9,831 fixed penalty notices.
Companies which ignore the fines can be subject to county court judgments, which can affect their ability to borrow money.
Devised by Wealthcare’s corporate benefits specialists, AE on a Plate is a paperless service which deals with the administrative tasks required of business owners to implement auto enrolment, including setting up a qualifying pension scheme and registering it with The Pensions Regulator.
AE on a Plate is aimed at companies with up to 30 staff and has been taken up by businesses including hairdressers, beauty salons, accountants, solicitors’ practices, bars and restaurants, recruiters, bakeries, florists, veterinary surgeries, charities, estate agents and web designers.
Stephen Cainer, joint managing director of Wealthcare, said: “Our figures show there is still an alarming lack of preparation on the part of employers around the UK.
“Auto enrolment is a legal duty for employers to enrol their staff in a workplace pension scheme and pay contributions. The earlier they prepare, the smoother the transition will be. Planning in advance is essential.”
Meanwhile Stephen said he hoped the government’s review of auto enrolment would lead to its scope being extended.
Changing employment patterns mean more and more people in the UK are excluded from auto enrolment. One in five workers is self-employed, on zero hours contracts or has several jobs which each pay less than £10,000 a year, which is the auto enrolment earnings threshold.
Stephen said: “We hope the review will look to widen the scope of auto enrolment so no-one is left behind.”