Widespread ignorance about auto-enrolment could cost small firms

Ignorance among hundreds of thousands of small businesses about auto-enrolment dates is high, research has found, sparking a warning that companies face hefty fines if they fail to get clued up soon. The call to action from The Pensions Regulator comes after a survey found about 20% of small employers and almost half of micro employers do not know the exact date they need to comply with automatic enrolment laws.Charles Counsell, the regulator's executive director of automatic enrolment, said: "Too many small and micro employers still don't know when their staging date is."While we write to employers 12 months ahead of that date, it is important for them to check if they need to be ready by next summer – or later. The easiest way to do this is by using the staging date tool on the regulator's website." {desktop}{/desktop}{mobile}{/mobile} He warned that failure to prepare in good time puts employers at risk of non-compliance and this can ultimately lead to financial penalties.The employer survey shows that most businesses have sought, or will be seeking help from advisers – and the regulator is now calling on accountants, independent financial advisers and bookkeepers to be ready for the demand.Mr Counsell said: "Looking at both reports alongside each other demonstrates the bigger picture: employers must prepare and they will be looking to advisers to help them."It is now vital that advisers use the information on our website so that they have the knowledge their clients are going to need to meet their pension duties." Some key findings from the adviser survey: • There was an almost universal level of awareness of changes in pension law among all adviser groups.• Accountants and bookkeepers were least likely to have used the regulator's website with 39% and 48% respectively being aware it was a source of information.• Accountants were significantly less likely to say they are acting, or intend to act on behalf of their clients or provide technical advice than other groups – with 48% offering or planning to offer a service.• Most intermediary groups also understood the key elements of the reforms with IFAs having the greatest understanding (99%) and accountants having the least understanding (71%). Key findings from the employer survey: • Nine in 10 employers staging between October 2014 and April 2015 had commenced preparation to meet their new duties.• Eight in 10 employers staging between October 2014 and April 2015 had consulted an adviser, with IFAs and pension providers the main types used.• Consistent with previous waves of the survey, most employers had consulted or planned to consult with an external adviser, ranging from 89% of smaller medium employers to 64% of micro employers.• Understanding of reforms had increased among all employer sizes.

Widespread ignorance about auto-enrolment could cost small firms

Related items

News from Twitter