The Auto Enrolment pension system for small businesses is turning into a nightmare with help for the red tape needed.
According to research by the Federation of Small Businesses (FSB), smaller businesses are unclear what they need to do when it comes to auto enrolment pensions and are certainly underestimating what the associated costs will be.
Over the next 2 years over 1 million businesses will need to set up a workplace pension scheme for their employees.
45% of business owners without a workplace pension scheme are still unclear about their responsibilities and 76% of owners said that auto enrolment pensions put too much pressure on their business.
Although most employers feel confident about auto enrolment, 45% of businesses who haven’t yet submitted are unclear on what they need to do, with 26% not knowing their staging date.
FSB also found that businesses were underestimating the costs of implementing workplace pensions:
businesses still to start the process expect overall costs to be approximately £903
businesses who have already introduced auto-enrolment reported average costs of £1436
1 in 5 businesses (19%) reported costs upwards of £2000.
30% of businesses that have yet to start auto-enrolment pensions are expected to plan wage freezes or cuts in response.
John Allan, FSB national chairman, said:
“The government must continue to monitor the roll out of auto-enrolment closely and take steps to lessen the burden on smaller businesses where possible. The move to postpone the planned increase in minimum employer contributions is welcome, as it recognises the extra challenges small firms face.”
If you are running a business and needing help with your auto enrolment pensions – you can either ring us now on 01242 583001 – email us on firstname.lastname@example.org or click the Contact Us button or please fill the form at the bottom of the contact us page.