Automatic enrolment  

Surge in interest in switching auto-enrolment providers

Surge in interest in switching auto-enrolment providers

Auto-enrolment inquiries made by small and medium-sized businesses (SME) has seen an 80 per cent increase since 2017, according to data from Aviva.

The number of SME businesses approaching advisers to switch their workplace pension provider has seen a year-on-year increase and the insurer is expecting the number of inquiries to grow. 

According to Aviva, the majority of switching inquiries from those in the secondary market have come through advisers, but over the last year there has been an increase in the number of business making inquiries themselves.

Many SMEs in the market have had their schemes for a number of years, leading to a secondary market where businesses are looking to change their auto-enrolment pension provider.

The secondary market is being driven by companies and their advisers who are now looking to see what other providers are offering, according to Aviva.

Malcolm Goodwin, head of workplace savings and retirement at Aviva, said the insurer is expecting the number of switching enquiries to grow.

Mr Goodwin said: "When auto-enrolment was first introduced some businesses will have viewed it as a hassle - something to just get done and out of the way.

"Since then, some of those businesses will have seen major expansion or may have changed their view on the importance of workplace benefits.

"Whatever the reason, we are seeing a major increase in the number of inquiries from businesses and their advisers who are realising they have the freedom to switch if they aren't happy with their current provider.

"So far we have seen inquiries rise by 80 per cent compared with last year. We expect that figure to continue to grow.”

FTAdviser reported recently (20 September) that the level of auto-enrolment compliance has been very high, according to The Pension Regulator.

According to The Pensions Regulator's 41-page annual commentary and analysis report (published 20 September), 84 per cent of employees are now saving into workplace pensions this year, compared with 77 per cent last year.