Personal Pension  

Auto-enrolment activity to peak tomorrow at 10,700

Auto-enrolment’s biggest staging date so far will happen tomorrow (1 July), according to research by Hargreaves Lansdown, which suggests that 10,700 employers will be auto-enrolling new recruits.

The number of employers lining up at the starting line is the greatest it has been so far, and this surge in volume will drop off significantly after this month, until micro-employers start staging next year, the firm said.

Laith Khalaf, head of corporate research at Hargreaves Lansdown said: “We are now hitting the peak in terms of auto-enrolment activity, and so far, so good.

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“However many auto-enrolment schemes will probably have to be adjusted or re-written to accommodate the new pension rules, including the pension freedom announced in the Budget, and the ban on commission payments to advisers.

“Much of the initial concern over auto-enrolment compliance was focussed on smaller companies, who have only just started to auto-enrol. Any flies in the ointment may therefore only start appearing from here on in.”

Hargreaves has outlined a number of concerns which may present themselves, despite low opt-out rates at only 10 per cent.

The overhaul of the pensions system announced in the Budget this year means that many auto-enrolment schemes will need to be reviewed, adjusted and possibly rewritten over the course of the year, said Hargreaves.

Similarly, despite the fact that 3.6m new pension savers have been auto-enrolled, 4.1m have not been included by the programme because they do not earn enough to qualify.

Finally, the Pensions Regulator’s register shows employer compliance with auto-enrolment may be falling behind.

The report shows that almost 8,000 employers could have missed their staging date. According to TPR, up to the end of May 2014, 15,099 employers had confirmed their auto-enrolment scheme details.

Hargreaves said in a note released today: “However a Freedom of Information Request from Hargreaves Lansdown shows that 22,940 employers should have hit their staging date by 1 May 2014.

“They do have up to 5 months to register their scheme, and with over 14,000 having hit their staging date in the past 2 months, perhaps many of them just haven’t yet got around to it yet.

“Nevertheless, these numbers seem to be consistent with anecdotal feedback we’re getting from within the industry that some employers in the current wave of staging are struggling to meet their obligations on time.”