SMEs Not Ready for Looming Auto-Enrolment Deadlines
Majority of small firms unprepared and face penalties as a result
More than half of UK small businesses are yet to set up auto-enrolment pension schemes, despite being legally obliged to do so by staging dates beginning next week.
This is according to research by AutoenrolSME, who surveyed owners of companies with between 62 and 249 staff. These businesses are legally obliged to have set up a pension auto-enrolment scheme by 1 April, 1 May and 1 July 2014. There are around 40,000 SMEs due to reach their staging date in 2014.
Of the business owners surveyed, 58% still had not set up an auto-enrolment scheme, while nearly two thirds (63%) were unaware of their staging start date.
Firms found to be in breach of statutory requirements are at risk of sanctions including an initial fixed penalty notice of £400 and additional daily fines. The Pensions Regulator has said it intends to punish persistent and deliberate non-compliance.
The survey also found that 90% of the business owners who are yet to implement a pension scheme for their staff have not even started researching one.
Rosie Smith, marketing manager at AutoenrolSME, said: “It’s clearly a worry that so many UK businesses aren’t ready and are unlikely to meet their legal obligations in providing a pension service for their staff.
“This could provide a windfall for the Government in terms of penalties, but a headache for those smaller businesses that aren’t prepared.”
Smith also noted small firms could become prepared in a matter of weeks.