Half of small businesses struggle with pensions
Nearly half of the UK’s small businesses admit to struggling with how to set up workplace pension schemes.
Research carried out by the Federation of Small Businesses (FSB) has highlighted this issue, as the deadline approaches for more than 1 million firms to establish workplace pensions for their employees.
It seems that many are still unclear about their obligations under “auto-enrolment”, when they need to comply, and how much it will cost to implement.
What is auto-enrolment?
The research found that, of those questioned, 75% of business owners believe that auto-enrolment – where all employees are offered a workplace pension – would put too much pressure on their businesses. 25% were concerned that their business might not be able to cope with the changes. Despite the fact that the majority of businesses are confident they’ll be able to implement auto-enrolment, many are unsure of what they need to do and one in four don’t even know when they’re supposed to start.
Some 60,000 larger companies with 6 million employees have already set up the scheme and in the next couple of years, more than 1 million small and micro businesses will be obliged to set up pensions for their employees under these rules.
Despite the misgivings, the research has found that companies generally believe that the pension system will be beneficial for their staff. It seems, however, that many have underestimated the costs involved in setting it up.
Those who delay implementing auto-enrolment risk a fine, so the message is clear: make sure you get to grips with your obligations and don’t delay.
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