One in five businesses in the UK is failing to auto-enrol its employees into a workplace pension, research by Now: Pensions has revealed.
In total, 41 per cent of businesses in the last quarter of 2016 signed up with the Danish-owned auto-enrolment specialist either in the month before their staging date, or after this date had passed.
Of these businesses, the majority did so after their staging date, accounting for 22 per cent of all businesses which signed up with Now: Pensions in the last three months of 2016.
A further 19 per cent of the businesses that signed up with Now: Pensions in the final quarter of 2016 waited until the last month to do so.
Now: Pensions figures were further evidence that small and micro-businesses are struggling to comply with the new requirements.
In the third quarter of 2015, The Pensions Regulator revealed that it issued 15,073 compliance notices out of a total of 26,040 since auto-enrolment began in 2012.
Aviva, meanwhile, reported one in seven businesses signing up to its auto-enrolment service in the fourth quarter of 2016 missed the deadline.
But Now: Pensions' figures showed a striking divergence between small businesses, revealing in Q3 and Q4 respectively, over a third of businesses were planning a clear six months or more ahead of their staging date.
That was a stark increase from the first quarter, when only 13 per cent were signing up to an auto-enrolment provider in advance.
Now: Pensions chief executive Morten Nilsson said, while it was encouraging to see are large number of businesses planning well in advance, he said it was clear a lot of firms were still "burying their heads in the sand".
"Small business owners have a lot to think about and it’s easy for auto enrolment to be put on the back burner, but the fines for non-compliance are steep and missing the deadline can cause unnecessary sleepless nights," he said.
"Auto enrolment is complicated so the longer firms leave to tackle it, the more confident and comfortable they’ll feel."
The Pensions Regulator has repeatedly warned employers that companies failing to comply will face the consequences.
These include a fixed penalty notice, which comes with a £400 fine, and an escalating penalty notice, which comes with a fine of between £50 and £10,000.
The Pensions Regulator warned employers that excuses for non-compliance such as illness, being short-staffed, or confusion between employers and their advisers, were not "reasonable".
"We recognise that employers have unique circumstances and challenges, but the law is still the law.
"Employers who are struggling should contact us, we are here to help - do not wait for a fine," Charles Counsell, TPR's executive director of automatic enrolment, said at the time.
james.fernyhough@ft.com
