It has been reported that micro-businesses are struggling to prepare for auto-enrolment as staging dates loom over the next coming year.
The costs for auto-enrolment are estimated at £8,000 per small business, yet 40% of vulnerable small businesses believe it will cost nothing to set up whilst 11% think it will cost around £5,000.
On average, it takes 103 days to set up auto-enrolement for SME’s and yet 85% of businesses polled think it will take 50 days or less.
Research has found that 34% of micro-business owners will offset any auto-enrolment costs and increased contributions for their staff penison pots, by capping salary increases, bonuses and overtime. Approximately 19% say they will reduce employee benefits and entertainment and only 37% have said they will take on the costs using business working capital.
It has also been reported that not just the financial but also the administrative strain caused by auto-enrolment will force some micro-businesses to consider non compliance. Research also revealed that 56% would encourage their staff to opt out if they were unlikely to be found out by the Pension’s Regulator and 68% say they’d be prepared to miss their staging date despite the £400 fixed starting fine for non compliance.