Research Showing SMEs Avoiding Financial Advice On Auto-Enrolment Concerns Pensions Lawyer

13th September 2013

Findings Support Argument That SMEs Require Online Solution To Deal Effectively With Auto-Enrolment A Sheffield-based pensions lawyer has expressed his concern following a recent report compiled for the Pensions Regulator which says that half of small firms are not going to pay a financial adviser for work around auto-enrolment.

According to Nigel Bolton, pensions partner at Irwin Mitchell, the report highlights that smaller organisations are still underestimating the complexities involved with auto-enrolment. He also believes it illustrates the need for an online solution for the SME market. Heralded as one of the biggest changes to the UK pensions' landscape in over 60 years, auto-enrolment will mean that all UK employers must automatically place their entire workforce into a qualifying pension arrangement. All employers must contribute to that pension arrangement and must monitor and keep records of their workforce's membership of the scheme. The laws came into effect for the UK's largest businesses last year and from April 2014, firms with a PAYE scheme size of between 249 and 160 will need to be ready. Firms with fewer staff members will be required to comply with the rules by a particular 'staging date' according to their size up until 2018. The report, compiled by GfK NOP found that 46% of medium, 48% of small and 51% of microemployers were not prepared to pay for advice. Nigel Bolton, pensions lawyer at Irwin Mitchell in Sheffield, said: -These findings are concerning but they do tally with our own recent report on auto-enrolment. Here we found that although many SMEs thought that they were ready for their staging date, many had not in fact considered many of the key issues. -The results of our survey found that almost 60% of firms had not budgeted for the additional costs that can be incurred as a result of auto enrolment, whilst nearly 40% said that their payroll system was not compliant. Six out of 10 businesses said that they had not checked the pensions provisions contained within their staff contracts and assessed how they affected plans for auto-enrolment. -When these results are combined with the fact that the Regulator has issued its first non compliance order, it is clear that SMEs cannot ignore the issues. Indeed the survey once again highlights the need for an online compliance solution for auto-enrolment to ensure they deal with the new rules effectively.