There are “significant risks” ahead as 1.8 million smaller employers begin the process of auto enrolment, a report by the National Audit Office (NAO) has warned.
Although more than 5 million people have been auto enrolled in workplace pensions so far, 97% of employers are yet to reach their staging date.
Smaller employers are expected to have different requirements than their larger counterparts which will create challenges both for individual companies and the Department for Work and Pensions.
Morten Nilsson, CEO of NOW: Pensions, commented on the NAO report:
“These smaller employers are fundamentally different to those that have gone before them.
“At best they may have somebody managing finance and payroll but many small business owners will be fitting auto enrolment around their other day-to-day responsibilities.”
NOW: Pensions highlights a lack of preparation among small employers as a key concern going forward. A survey by the company showed that 20% of small and micro firms said they hadn’t given any thought to the process.
The changes to workplace pensions are not the only potentially significant changes on the employment landscape that may affect the financial health of smaller employers.
Employers should be aware of the following as well:
- the introduction of the national living wage
- the incoming apprenticeship levy
- holiday pay entitlement
- gender pay gap reporting.
Contact our team to talk about employer obligations.