HR · 27 June 2017

Alarming number of small firms still unaware of auto-enrolment law

By 1 February 2018, every employer must contribute towards a pension for each member of staff, unless they opt out
A third of small UK business owners remain unaware of auto-enrolment law and how it will affect their company when workplace pensions becomemandatoryin 2018, according to new survey findings.

Ahead of the final compliance deadline on 1 February 2018, online local services marketplace 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, 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 weve 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.



Praseeda Nair is an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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