A study by the FSB found that 45% of small businesses are confused about the process of setting auto-enrolment into qualifying workplace pension schemes for their employees.
Research from the Federation of Small Businesses showed that “although smaller firms generally believe auto-enrolment will be good for their staff … many are still unclear what they need to do, when they need to do it, and how much it will cost”.
Auto-enrolment and small businesses
During the next two years, more than a million small businesses will be required by law to set-up a workplace pension for their employees in line with Government rules for automatic enrolment.
The financial implication of automatic enrolment is also a worry for small businesses, with the FSB finding that many had underestimated the cost of implementation. Not such a surprise, then, that 3 out of 4 business owners felt that the auto-enrolment pension scheme is putting too much pressure on their business.
Perhaps even more shocking was the statistic that 26% of small businesses involved in this study did not know their staging date (the date that auto-enrolment comes into effect for them) suggesting that a number of small businesses are responded to the confusion by burying their heads in the sand.
But we’d urged anyone putting it off to get organised. There’s no doubt that these changes are coming and will affect most small businesses – but by how much depends on your willingness to get your ducks in order.
With our shared offices, co-working spaces and virtual service offerings, The Workstation is home to many small businesses which may be affected by these changes. If you’re feeling out of your depth when it comes to auto-enrolment, you may find the following questions and answers useful.
Does auto-enrolment apply to me?
If you are the only person in your company then you do not need to provide a pension scheme for yourself but if you are an employer with staff working for you in the UK then yes, auto-enrolment does apply to you.
When should I start planning for auto-enrolment?
Your staging date may seem like a long way in the future but the sooner you get your head around what you need to do, the better. NOW: Pensions suggests that ideally, you should start planning 18 months before your Auto Enrolment staging date.
Where can I get help with auto-enrolment?
There are lots of resources out there that can help you business set-up auto-enrolment pensions for your small business. The first place to look is on The Pensions Regulator website which offers helpful videos (including the one below) a link where you can find out your staging date and lots of detailed help articles.
They’ll also walk you through what you need to do with their easy to use ‘Duties Checker’. For more guidance, you could take a look at The FSB’s own workplace pension product designed to help business owners set up their company pension schemes easily. If you have an accountant or bookkeeper, they may also be able to provide investment advice on the best pension scheme for you and your employees.