A quarter of UK business owners starting a workplace pension scheme in 2017 missed their auto-enrolment staging date, according to the NOW: Pensions provider.
The figure represented a record number for the pensions provider, and suggested a growing tendency for employers to leave complicated workplace pension duties to the last minute.
Almost half of all employers that signed up with the company for the April 2017 deadline did so within a month or after the auto-enrolment staging date.
Curiously, over a third of employers signed up at least six months ahead of their auto-enrolment staging date, highlighting two distinct approaches to pensions admin.
By the end of April 2018, it is estimated that 700,000 new businesses will be brought into the auto-enrolment scheme. The rise in eligible firms followed rule changes in 2016, meaning small business owners employing fewer than 30 staff were brought into auto-enrolment.
The Department for Work and Pensions expected 178,000 new employers to enter auto-enrolment schemes at the start of April 2017.
Commenting on the growing trend of missing the auto-enrolment staging date, Morten Nilsson, CEO of NOW: Pensions, said employers were “burying their heads in the sand” in terms of the new payroll duties, despite a number of worrying consequences.
“This can be costly, as The Pensions Regulator (TPR) has begun to issue fixed penalty notices to employers who miss their staging date deadline, which left ignored, can escalate into a County Court Judgement (CCJ) and could negatively impact the company’s credit file and its ability to secure funding in the future,” Nilsson said in a statement.
The TPR has been found to take a tough stance on smaller employers missing the auto-enrolment deadline.
Figures from the regulator revealed a record number of compliance notices had been handed out between June and September 2016. Some 3,728 fixed penalties were issued to employers from a total of 15,000 notices sent out.
“Our message to these employers is to plan well ahead, ideally up to six months before their staging date, as this will ensure enough time is given to comply with their auto-enrolment duties as set out by TPR,” Nilsson warned.
However, employers are not obliged to complete a statement of compliance to TPR until five months after the auto-enrolment staging date.
“Auto enrolment is complicated so the longer [employers] allow themselves to tackle it, the more confident and comfortable they’ll feel,” Nilsson added.
Take a look at our auto-enrolment infographic to find out everything you need to know about workplace pensions
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