One-in-three SMEs may ignore new pensions rules
3rd October 2013 | News
Almost a year to the day since pensions auto enrolment rules came into force, a new survey has indicated one third of small businesses plan on ignoring the new rules.
The research, by Clarity Surveys for Second Sight, found that two-thirds of SMEs surveyed said they had little or no knowledge of the legislation.
Around 38,000 businesses will be required to auto-enrol their employees in the next 12 months, with fines of £2,500 per day on the horizon for businesses employing 50-250 workers that fail to comply.
Matthew Mitten, partner at Second Sight, said the findings of the survey were cause for concern.
"We were very surprised to see the statistic on the number of companies that will refuse to comply," he said.
"Of course not all non-compliant SMEs next year will receive an escalating penalty and the reality is that most still have enough time to plan, but the figure we quote clearly demonstrates the lack of awareness around the fines and the enormous impact they could have on SMEs.
"Equally, the lack of knowledge about the new rules and the timescales involved is a serious issue that needs to be resolved."
Additional research from Sage has found that almost two-thirds of businesses don’t currently have a pensions scheme in place, while more than half expect an impact on their payroll system. A fifth of businesses surveyed also anticipate cash flow problems as a result of the new rules.
Jonathan Dowden, pensions expert for Sage UKI, said: "The real challenge is getting the tens of thousands of businesses who are yet to stage up to speed and compliant.
"It is imperative they understand the need to build in increasingly larger amounts of contributions for their employees into financial forecasts to 2018 and beyond."