Most advisers - 77 per cent - predict that growing numbers of pension providers will not offer auto-enrolment schemes to businesses with fewer than 30 employees, according to research conducted by Defaqto on behalf of Now: Pensions.
A third of the 248 advisers surveyed already believe there is not enough choice for employers nearing their staging dates, with 82 per cent claiming providers have been cherry picking auto-enrolment business.
Guaranteed acceptance was the most important factor given by nearly a third of the auto-enrolment schemes that advisers have written so far, closely followed by the level of charges cited by 29 per cent.
Alongside this, two thirds of the advisers surveyed expected to see a growing number of pension providers introducing an employer charge for auto-enrolment, with 69 per cent claiming that a charge would not necessarily deter them from recommending a scheme.
Morten Nilsson, chief executive officer at Now: Pensions, pointed out that owners of small firms may have little or no experience of pensions and will be fitting auto enrolment in around their other day to day responsibilities.
“For many providers, the effort involved with administering these schemes won’t be worth it. Widespread cherry picking is already occurring but as smaller firms reach their staging dates, it’s like that growing number of providers will close their doors altogether.
He added that Now: Pensions is one of a very small number of pension providers willing to accept all employers and employees.
ruth.gillbe@ft.com
