PensionsOct 22 2014

Advisers complain of auto-enrolment latecomers

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Nearly three quarters of advisers say employers are coming to them for advice either very close to, or after, their auto-enrolment staging date, according to new research from Now: Pensions.

A survey carried out by Defaqto among 244 advisers, revealed that 50 per cent said employers have turned to them very close to their staging date, while 22 per cent said firms approached them both very close to and after their staging date.

With 1.2m small and micro businesses set to begin staging from June next year, 87 per cent of advisers raised concerns that employers lack the knowledge to make informed decisions on the appropriate auto-enrolment solution for their employees.

Morten Nilsson, chief executive of Now: Pensions, said: “As small and micro companies begin to tackle the complexities of auto-enrolment, many will lack the know-how, experience and resources required.

“While it is fairly common for employers to come to us late in the day or after their staging date, we urge those who will begin staging next year, to plan ahead.”

Last November, The Pensions Regulator published recommendations to firms that they should have their pension scheme provider and advisers in place “at least” six months before their staging date to avoid falling foul of their legal obligations.

Looking ahead, Now:Pensions found that 51 per cent of advisers surveyed said they were confident that auto-enrolment represents an opportunity for them to grow their business.

Scott Gallacher, Chartered financial planner at Leicester-based IFA Rowley Turton, said: “Unfortunately auto-enrolment is not something employers can just ignore, and with a predicted capacity crunch looming as traditional pension providers shun the smaller end of the market, and many financial advisers choose not to advise on auto enrolment entirely, smaller employers need to act now to avoid potential non-compliance fines of £500 per day.”

peter.walker@ft.com