Top insurers Aviva have identified a “worrying trend” in auto-enrolment set-ups as staging deadlines for SMEs pass and have warned many firms are risking fines.
Number of Firms Missing Staging Date Booms
A review of their own data on auto-enrolment applications revealed to Aviva that a shocking 1 in 7 of businesses are applying to set up workplace pension schemes after their allotted staging date, set by The Pensions Regulator, has passed.
With big business deadlines now passed, as smaller firms have begun to approach and pass their dates, Aviva have noticed that the proportion of firms missing their staging date has “increased rapidly” from just 1% in Q1 2016 to 14% in Q4.
Under auto-enrolment legislation, around 500,000 UK businesses are due to set up a pension scheme during 2017. But at the end of 2016, Aviva’s data shows that 38% of businesses are leaving applications to the last minute. Only a third of businesses are applying to set up auto-enrolment pension schemes 2 months or more in advance of their given deadline.
“The last thing anybody wants is… small business owners getting fined.”
The company’s figures are mirrored by those of The Pensions Regulator, which also show that a growing number of employers are failing to fulfil their auto-enrolment obligations. The Regular issued 3,728 fixed penalty notices for £400 in Q3 2016, 3, up from just 861 in Q2, 2016.
Andy Beswick, Managing Director of Business Solutions at Aviva, said:
“We’re seeing more and more firms applying to Aviva for a workplace pension after their staging date has passed. It’s something we need to keep a close watch on, but, it is understandable. Auto-enrolment is now becoming a reality for very small companies which have many priorities and not necessarily the resources to deal with them all.
“We understand this and we’re doing all we can to help these companies. We can help those companies that have missed their deadline and we’ve set up a simple online process to get a workplace pension in place. The last thing anybody wants is to see small business owners getting fined because they haven’t got their workplace pension set up in time.”
He added that businesses would be wise to prepare in advance. “The decision of which provider to use for a workplace pension shouldn’t be rushed so dealing with it well in advance of the staging date can be an advantage.
“The message to businesses for 2017 is clear. If you haven’t been through auto-enrolment yet, this is likely to be your year. Don’t stick your head in the sand. Embrace it, find a way to use it as an advantage to your business and get your employees enthused about saving for their future.”
Want to learn more?
Subscribe to our newsletter to get accounting tips like this right to your inbox
About The Author
We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!