Small businesses with fewer than 30 employees will start to be phased into the government’s auto enrolment scheme this month and will have to provide their staff with workplace pensions.
These small businesses will range from those with just one employee upwards and will be gradually asked by the Pension’s Regulator (TPR) to provide a workplace pension scheme for their employees. Those who do not, could be liable for a £400 fixed penalty notice according to TPR.
The National Chairman of the Federation for Small Businesses (FSB), John Allan said the change for smaller businesses presents a “major challenge”.
“Small business owners are not pension experts and a significant number will not have any staff saving into an existing workplace pension scheme. These businesses require a clear and simple process and readily available impartial advice and support,” he said.
Allan added that the FSB remains concerned that small employers will be faced with additional administrative burdens and payroll costs.
Auto enrolment means that all employees, under 22 years of age and who earn more than £10,000 per year have a right to a workplace pension, although they can choose to opt out.
Around 5.2 million employees in 45,000 bigger businesses have already joined the scheme.
The Pension’s Regulator has been criticised by various bodies and small businesses for the lack of information and extra admin.
If you need any assistance or advice with regards to auto enrolment for your business, we suggest you contact us today.