Ignorant Businesses Risk £22m in Auto-Enrolment Fines
21% of micro-business owners have a "limited understanding" of their responsibilities to set up a pension scheme
The UK’s smallest businesses risk collective fines of up to £22m for failing to fulfill their auto-enrolment duties, Paycircle has reported.
Paycirlcle’s analysis of The Pensions Regulator’s latest report shows that, of the 262,000 micro-businesses (those employing one to four members of staff) expected to stage this financial year, 21% or 52,000 have a “limited understanding” of their duties to set up a workplace pension scheme.
Small business employers appear to be less confused about auto-enrolment legislation – only 12% of small employers (those who employ between five and 49 staff) said they had a “limited understanding”.
Paycircle calculated the £22m penalty sum by multiplying The Pension Regulator’s average fine granted to businesses that miss their staging date (£400) with the 52,000 businesses that look likely to fail to create a pension scheme in time.
Catherine Pinkney, co-founder of Paycircle, said:
“The concern is that the vast numbers of micro employers still to stage are a hugely diverse and hard-to-reach segment of the business and social care community, ranging from people who employ nannies to those who rely upon personal care assistants.
“Many don’t even see themselves as employers, which is another problem in itself. They just don’t think auto-enrolment is relevant to them. More than ever, workplace pension providers need to cut through the complexity that surrounds workplace pensions and provide solutions that empower micro employers to auto enrol effortlessly and at the lowest possible price.”
Worried about being auto-enrolment ready? Visit The Pensions Zone.