More than 570, 000 small business owners will be required to stage for auto-enrolment before 2018
Over half of small business owners believe their firm will not be ready to offer pensions auto-enrolment to workers within the government’s 2018 deadline due to high unforeseen operational costs.
The results of a recent survey by Geniac have shown that startups invest 22, 756 in the first year of trading, to cover essential administration. Small firms underestimate these costs by 2, 525 on average, the survey found.
With more than 570, 000 small business owners required to stage for auto-enrolment over the course of the next year according to the Pensions Regulator, it is expected that many firms who are already stretched may inadvertently miss deadlines and incur costs.
The cost of non-compliance for auto-enrolment can reach as much as 500 a day which, for small firms, could be a key difference between success and failure.
Geniac found that as many as 64 per cent of small firm owners said that unexpected costs, with 23 per cent reporting profit losses, 21 per cent being forced to readjust annual targets and seven per cent being forced to cut staff numbers.
Commenting on the survey results, Geniac co-founder Mike Galvin said that many business owners simply remained in the dark about their auto-enrolment responsibilities. The fact that over half of small businesses are unprepared for auto-enrolment should ring alarm bells.
entrepreneurs must avoid sleepwalking up to the deadline as this could cost them dearly, especially fledgling companies with limited budgets, he said.
Small business owners confused about auto-enrolment can seek advice about their responsibilities. The Pensions Regulator is one resource, providing step-by-step guides and regulatory advice.
Read on for our expert’s top five tips for preparing for auto-enrolment.
