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Businesses Still Unclear on Auto-Enrolment


45% of business owners without a workplace pension scheme are still unclear about their responsibilities.

According to research by the Federation of Small Businesses (FSB), smaller businesses are unclear what they need to do when it comes to auto-enrolment pensions and what the associated costs will be.

76% of owners said that auto-enrolment pensions put too much pressure on their business.

Over the next 2 years over 1 million businesses will need to set up a workplace pension scheme for their employees.

Although most employers feel confident about auto-enrolment, 45% of businesses who haven’t yet submitted are unclear on what they need to do, with 26% not knowing their staging date.

FSB also found that businesses were underestimating the costs of implementing workplace pensions:

  • businesses still to start the process expect overall costs to be approximately £903
  • businesses who have already introduced auto-enrolment reported average costs of £1436
  • 1 in 5 businesses (19%) reported costs upwards of £2000
  • 30% of businesses that have yet to start auto-enrolment pensions are expected to plan wage freezes or cuts in response

John Allan, FSB national chairman, said:

“The government must continue to monitor the roll out of auto-enrolment closely and take steps to lessen the burden on smaller businesses where possible. The move to postpone the planned increase in minimum employer contributions is welcome, as it recognises the extra challenges small firms face.”

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