Despite increased awareness of the deadlines for introducing pension auto-enrolment, many small businesses are not preparing in enough time to make the changes necessary, according to new research by the Forum of Private Business (FSB).
The research revealed that 90% of FSB members were aware of the deadlines for them to have a scheme in place, but 51% had still not taken any of the steps required to be ready.
Although more SMEs are aware of the new rules compared to in previous studies, the FSB say that more business owners must understand the importance of starting the auto enrolment planning process sooner rather than later.
Ian Cass, head of business support at the FSB, said:
“Questions over the ability of providers to cope with the high demand for pensions advice, and their willingness to offer products to the SME market are a growing worry as we get ever closer to auto enrolment deadlines.
“What is becoming all too apparent is that companies who fail to plan sooner rather than later could find themselves paying a premium for advice and more limited options.
“With average costs for auto enrolment currently estimated at £8,900, these are only likely to go up the closer we are to those all important staging dates.”
The new rules state that employers must automatically enrol employees in a pension scheme if they work in the UK, are between 22 and the state pension age and earn more than £10,000 a year.
Image by Pedro Ribeiro Simões