PA life
PA life

A third of small businesses unaware of pension enrolment

More than one in three small business owners have admitted that they donโ€™t know what pension auto-enrolment is, despite the fact that the scheme will be mandatory starting next year.

Business owners are expected to contribute to employeesโ€™ pensions unless they opt out, yet 35% had no knowledge at all and 43% believed that the financial strain on their company will prevent them from hiring additional staff. All employees are expected to join the scheme, and failure to prepare by 1 February 2018 will result in serious fines, legal action and risk of imprisonment for business owners and directors.

The survey was run by Bidvine, who teamed up with the Auto-Enrolment Bureau to create a guide based on their results, and what needs to be done to get ready for the next year.

While more than a third had no idea what the pension auto-enrolment was, a further third admitted that they currently have nothing put in place to prepare for the looming deadline, although nearly half of business owners do agree that auto-enrolment is the right move for employees. Only 35% of respondents believe that enough information is being provided to small businesses to get them ready in time, with the majority concerned that theyโ€™re being neglected.

โ€œWe wanted to get insight into what small businesses think about auto-enrolment, seeing as itโ€™s going to affect every employer in the UK, we were astonished to discover that many didnโ€™t even know what it is!โ€ said Russ Morgan, co-founder of Bidvine. โ€œWe were pleased to see that most business owners agree that auto-enrolment is a good idea, however it is slightly worrying that 43% said the extra cost will affect hiring new employees โ€“ something the government may have to consider in the future as it may affect employment.

โ€œIt might seem like a way off yet, but as you will see in the guide weโ€™ve created with the auto-enrolment bureau, business owners should start the process six months in advance in order to be compliant.โ€