Despite an upcoming deadline, a third of small business owners still don’t know what pension auto-enrolment is.
A recent survey, conducted by local services marketplace Bidvine.com, of more than 2,300 small businesses in the UK revealed that a third (35%) do not know what pension auto-enrolment is, and more than two fifths (43%) have stated the extra expense will affect the hiring of new staff.
In 2017, some 200,000 employers per quarter will be reaching their staging date for workplace pension schemes under the Government’s automatic enrolment rules. Nearly eight million people, across over 500,000 businesses, are now saving for their retirement. Auto-enrolment will become mandatory for all British businesses by 2018. Business owners will have to contribute to all of their employees’ pensions, unless they opt out.
The new legislation has a deadline of 1st February 2018 at the very latest and will force all businesses in the UK to contribute to their employee’s pensions. All employees will be automatically enrolled into their work pension scheme unless they choose to opt out. Non-compliance can result in hefty fines and even imprisonment for business owners and directors. 66% of those surveyed didn’t know the deadline for auto-enrolment.
TaxAssist Accountants has advised its customers to adhere to the deadlines to avoid the fines.
Jo Nockels, Senior Training and Technical Communications Manager, said: “In the first quarter of this year, over 17,000 fines and other sanctions have been issued to small businesses who did not meet their staging date for the new auto-enrolment pensions. One small business, which cited work pressures as a reason for not complying with the new regulations, was given a £40,000 fine plus court costs.”
Of the questions posited in the survey, one was ‘has your business already complied with pension auto-enrolment?’ Worryingly, more than a third of respondents didn’t know what auto-enrolment was, a third answered no.
The study also asked respondents if they think there has been enough support and information available for small businesses about auto-enrolment and 65% answered no, compared to 35% who said yes. Almost two thirds (62%) think that a majority of their staff will stay ‘opted in’ to the pension schemes.
When participants were asked if they agree with auto-enrolment becoming compulsory, more than two fifths said yes and just less than a third think it should be optional whether businesses should contribute to their employee’s pensions.
Bidvine.com Co-Founder, Russ Morgan, said: ‘We wanted to get insight into what small businesses think about auto-enrolment seeing as it’s going to affect every employer in the UK. We were astonished to discover that many didn’t even know what it is!”
Jo Nockels, from TaxAssist Accountants, added: “We’re advising many local business owners who have now received notices from the Pensions Regulator giving the date from which they must automatically enrol all eligible employees into a pension scheme and contribute to their pension pot. Some have planned well in advance and have fully compliant schemes up and running already.”
Are you concerned about auto-enrolment? Have a question about pension schemes in general? TaxAssist Accountants work closely with Wren Sterling and are happy to help. Call today on 0800 0523 555 or use our online enquiry form.