SMEs still not ready for auto-enrolment

SMEs still not ready for auto-enrolment

At least 45 per cent of business owners without a workplace pension scheme are still unclear of their responsibilities, according to research from the Federation of Small Businesses (FSB).

Of the 45 per cent, a quarter are not confident their business can cope. Barely half of businesses (51 per cent) are confident they can meet the challenge of the new workplace pension.

The research points to the increasing confusion. As many as three in four business owners said AE pensions put too much pressure on small businesses, which are required to set up a workplace pension for their employees by 2018.

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“It is too early to say whether AE has been a success for small and micro businesses,” said Chris Daems, director at London-based Cervello Financial Planning. “The reality is that a clear picture will not emerge until later this year when it will be clear whether many of the hundreds of thousands who are due to stage this year have complied successfully.”

The research also found businesses underestimating the cost of implementing AE. The numbers show that smaller businesses expect the overall cost to be approximately £903, but firms that have already introduced workplace pension schemes estimate it to be around £1,436.

“With the large number of micro and small businesses due to comply, efficient and effective AE solutions will play an increasing role in helping these types of businesses,” Mr Daems added.