INSIGHT: SMEs And The Latest Stage In Auto Enrolment
Auto enrolment was launched three years ago and since then 21,000 UK employers have taken up a workplace pension scheme, but as it reaches the staging date for the majority of smaller UK companies, Pearson Pension Specialist, Simon Taylor, says many are unprepared.
The Government has made changes to encourage people to save for retirement with the number of retired people due to rise by more than a third by 2050. Pension reform aims to help people to save so they don’t have to rely only on the State Pension.
The Department of Work and Pensions estimate that 11.9 million people are under-saving for retirement and hopes auto enrolment will reverse this trend.
The Treasury can track company engagement and the deadline for compliance falls five months after the staging date. But says Simon, as staging goes live for smaller companies it is vital they comply and avoid hefty penalties of £1,000s.
“We are now about to see perhaps the biggest wave of companies due to have staging dates, the smaller SMEs, and as with all pensions planning ahead is vital. I would urge anyone who has delayed to get in touch as soon as possible for help and advice,” he said.
“I have been working with a number of bigger North West companies managing their auto enrolment. We have been involved with them throughout the whole process, I briefed the directors and partners initially, then went in to present to staff and finally have been involved in bespoke one to one sessions with the employees,” he added.
“I think we have been able to add value to their schemes as we have worked with them through the process and liaised with them step by step providing advice and guidance as the scheme went live.
“Those companies who have not had a pension scheme, other than stakeholder pensions, have not been used to group schemes and appear to have been afraid of the responsibility and concerned and confused about what they as employers need to do and that is where we have come in.”
What to do and when
It’s essential to know when your employer duties will affect your organisation. This way you can make sure you’re in the best position to comply with the new legislation.
The Pensions Regulator (TPR) will have informed you of your staging date. Large employers whose duties started in 2012 were contacted 18 months before their staging date. They will also have had a reminder 12 months before. All other employers are contacted 12 months before their staging date.
In general, employers with the largest numbers of workers in their PAYE schemes will have the earliest staging dates and the smallest organisations the latest staging dates as shown below.
30 to 49 staff between August 2015 and October 2015. Fewer than 30 staff between January 2016 and April 2017.
“We have been able to take the headache away from employers,” said Simon. “It can be seen as an advantage for you as an employer as we offer bespoke one to one advice sessions with your staff - this puts you the employer in a good light, you are seen to be offering personal financial advice sessions for your staff and such added value can only be a good thing,” he said.
To talk informally with Simon on any auto enrolment issues or if you simply want pension advice call him for a no obligation chat on 0161 785 3500 or email firstname.lastname@example.org
Also in this issue of Insight
- The pitfalls of using social media in your business
- Shareholders, directors and partnership disputes
- Shared Grandparental Leave Announced
- SMEs And The Latest Stage In Auto Enrolment
Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.
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