SMEs still struggling to get to grips with Auto Enrolment
15th November 2013 | News
A large proportion of small business owners are still wholly unprepared for Auto Enrolment, with new research suggesting most have no idea of the costs involved and almost half not understanding the concept at all.
The study, conducted on SME owners by Clifton Wealth during October 2013, highlights a glaring lack of understanding and preparation for pension Auto Enrolment, despite the government initiative being in action for more than a year.
Auto Enrolment (AE) is a new government law that insists every employer must automatically enrol their employees into a workplace pension scheme if they are aged between 22 and the state pension age or earn more than £9,440-a-year and work in the UK.
Around half of business owners surveyed within the report claimed they did not understand what AE is, while 82 per cent of respondents admitted they did not know the "ball-park" cost of AE for their companies.
The research suggests that AE has not been effectively communicated to SME owners by the Department for Work & Pensions (DWP) and The Pensions Regulator (TPR).
Anthony Carty, group financial planning director of Clifton Wealth, said: "We have been warning SME owners for some time that AE is not something that can be ignored and requires planning.
"However, our research has shocked us in terms of just how serious the situation actually is. We are extremely concerned, both for employers and for specialist AE advisors, such as ourselves, that an avalanche of requests to plan and implement AE is only months away."
In the event that businesses have an existing scheme in use or one that can be adapted for AE, it is best to decide whether it meets the minimum criteria.
The Pensions Regulator provides companies with a qualifying DC schemes tool to assist employers in finding out whether their existing scheme can continue to be used.
At TaxAssist Accountants we are working in partnership with Scottish Widows, one of the UK’s leading pension providers, to create a tailored Client Pension Scheme for TaxAssist Accountants clients. The scheme offers a host of features and benefits for small businesses that are normally only available for larger organisations.