A third of small UK business owners remain unaware of auto-enrolment law and how it will affect their company when workplace pensions become mandatory in 2018, according to new survey findings.
Ahead of the final compliance deadline on 1 February 2018, online local services marketplace Bidvine.com assessed over 2,300 small business owners and uncovered significant gaps in their understanding of auto-enrolment.
For the two-thirds aware of the implications of auto-enrolment law on their business, only a third could cite the final cut-off date next year.
Preparation was also found wanting. A third said they had laid no groundwork for their staff’s workplace pensions, despite the threat of heavy fines for non-compliance.
Of those ready for workplace pensions, 43 per cent were worried it would affect their recruitment power in the coming years, while almost two-thirds expected all employees to remain opted in.
As has been previously reported, respondents claimed government support had so far been insufficient. Only a third said they had received official guidelines to assist with the transition.
Commenting on the survey findings, Russ Morgan, co-founder of Bidvine.com, said he was “astonished” with the low awareness of auto-enrolment law within the small business community.
“It might seem like a way off yet, but as you will see in the guide we’ve created with the auto-enrolment bureau, business owners should start the process 6 months in advance in order to be compliant.
“We were pleased to see that most business owners agree that auto-enrolment is a good idea, however it is slightly worrying that 43 per cent said the extra cost will affect hiring new employees – something the government may have to consider in the future as it may affect employment.”
By next February, every UK employer must contribute to a pension for every employee, who are automatically enrolled unless they opt out. Heavy fines will be issued for non-compliance, while the most serious offenders could even face imprisonment.
The Pensions Regulator (TPR) has already demonstrated its tough stance on employers. In the three months to September 2016, TPR issued 3,728 fixed penalties to non-compliant business owners, following 15,000 notices in the same period.
TPR suggested the figure meant small firms were leaving auto-enrolment duties until the last minute.
Charles Counsell, executive director of auto-enrolment law at TPR, said the body was “here to help”.
“The vast majority of employers are meeting their automatic enrolment duties. A small minority do leave plans too late but in most cases the nudge of a compliance notice is enough to get them back on track and avoid a fine,” he said in a statement.
Our pensions expert explains why auto-enrolment law needn’t be a headache for micro firms
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