Small businesses bamboozled by auto-enrolment » SMEInsider

Small businesses bamboozled by auto-enrolment

Three in four business owners also said auto-enrolment pensions put too much pressure on businesses like theirs, a new survey from the FSB Big Voice Community has found.

Although smaller firms generally believe ‘auto-enrolment’ will be good for their staff and that workers should save for the future, many are still unclear what they need to do, when they need to do it, and how much it will cost.


Over a million small businesses affected

Over the next two years more than a million small and micro businesses will need to set up a workplace pension for their employees under the government’s automatic enrolment rules.

January sees the number of employers reaching their designated staging date – the date on which they need to start complying with auto-enrolment – rapidly ramp up with tens of thousands ‘staging’ each month in 2016 and 2017.


Many still ‘concerned’

John Allan, FSB national chairman, said: “Our message for small employers is auto-enrolment is coming and will affect your business – and the sooner you get to grips with what you need to do, the better off you will be.

“Most of the businesses which have already set up a work place pension told us they found the process fairly straightforward, but we know many remain concerned about their ability to cope.

“These businesses should feel reassured that there is plenty of information and support available to help them through this process, both through the FSB and from the Pensions Regulator.”


  • brianm101

    A number of micro business I know are just going to shut up shop – some have just one employee who often earns more than the owner and gets holidays, maternity/paternity leave etc.

    All the government had to do was to introduce higher NI contributions and have a better state pension in the future – Which would have been more secure and certain for employees than the rip off pension sector that they are now being exposed to.

    But I guess certain ministers have friends in the pension industry!

    • That is a solution certainly. The government’s record is less -assuring. NIC’s have risen over the past 30 years in a number of ways and income tax rates have fallen. The State Pension has declined in relation to earnings, the latest version is intended to leave no-one worse off.

      AE has been described as a tax on jobs although it does gives a very valuable benefit to the employees. So, would the government be able to manage the system more efficiently if NIC’s were increased, and give individuals a pension related to the contributions paid by the employer and employee? Well, we had SERPS and S2P until very recently, each revision being more complex then the previous until it was scrapped. The cost of administering AE has to be lower, the value to employees significantly higher. Progress.

      It also gives choice, you can opt out and end up with nothing. Brilliant!!!

      • Sorry, first line should be “re-assuring”, “than”, not “then” further on.

      • brianm101

        Don’t disagree about the incompetence of government to run anything, however private companies are often little better, especially when you are forced to use them.
        Unfortunately money theory might well frustrate private pensions anyway.
        Pensions are only a ‘promise’ of a share of future wealth of a society. Private pensions work provided not too many people take them out. If private pension are universal then the future promise becomes a heavy burden on society. As with state pensions, in reality its the current workers that pay for current pensioners. Once everyone has private pensions Government looses control of how heavy this burden is.
        A good example of this mechanism is the current Buy to Let market, where individuals have invested heavily and made it hard for others to buy their own homes.
        If there is large improvement in efficiency (robots, automation etc.) or if the extra investment creates a wealthier society then things may work out well, but don’t count on it!