A record number of warning letters and fines have been sent to small businesses failing to comply with auto-enrolment, as it was revealed the obligation is low on the list of priorities for firm’s owners.
According to a survey by Now: Pensions more than a third of SMEs that have staged since April have waited until the last minute to set up a scheme or have missed the deadline completely.
Indeed, the survey shows that just three per cent of 350 businesses questioned cited auto-enrolment as their top concern.
A total of 34 per cent of the firms, all with less than 50 employees, put sales at the top of their list of concerns for the coming year, followed by access to capital at 12 per cent.
The EU referendum, government spending cuts, keeping up with technology and IT security took the next four spots, all under 10 per cent.
Auto-enrolment was placed in seventh place, just ahead of the introduction of the living wage.
Now: Pensions chief executive Morten Nilsson warned businesses they needed to place more emphasis on auto-enrolment and urged them not to put off planning until the last minute.
“With so many other things to think about it is easy to see how auto-enrolment can slip through the cracks,” he said. “But, the penalties for non-compliance are steep – as much as £500 a day for firms employing five to 49 people – so small firms need to give it the attention it deserves.”
The Pensions Regulator has revealed it has handed out a record number of fines in the first three months of this year. In fact, pension platform Paycircle calculated that if the current rate of fines being handed out continues, an estimated 63,000 SMEs will owe more than £25m by 2018.
Companies are obliged to enrol employees, who can then opt out if they choose. To date the Government-backed scheme has seen more than six million workers saving for their old age for the first time.
For further advice on pensions and for help with your auto-enrolment obligations, please contact the expert team at Birchwood today.