Pension Providers to “Close Doors” for Small Business Auto Enrolment
Majority of advisers believe pension providers will not offer schemes to firms with fewer than 30 employees
More than three quarters of business advisers believe there will be growing numbers of pension providers who will not offer auto enrolment schemes to companies with fewer than 30 employees, research conducted by Defaqto and NOW:Pensions has claimed.
Surveying 248 advisers, 82% said they felt providers had been “cherry picking” businesses for auto enrolment schemes and 33% said small businesses didn’t have enough choice over pension providers.
Over two thirds of business advisers (67%) said they expect to see an increasing number of pension providers introduce an employer charge for auto enrolment yet 69% admitted a charge would not deter them from recommending a scheme.
NOW: Pensions CEO, Morten Nilsson, commented: “Auto enrolment is working but its biggest challenge is yet to come. Owners of small firms will have little or no experience of pensions and will be fitting auto enrolment in around their other day to day responsibilities. These firms are going to need considerable help both setting up their schemes and with ongoing administration.
“As smaller firms reach their staging dates, it’s likely that growing number of providers will close their doors altogether.”