A new survey from online services marketplace, Bidvine.com has revealed that a third of small businesses are unaware of what auto-enrolment is.
The survey was conducted on 2,300 small businesses in the UK. 35% said they didn’t know what auto-enrolment is. 43% said that the added expense of contributing to pensions will affect their ability to hire new staff.
What is auto-enrolment?
Auto-enrolment will be mandatory for all British businesses by February 2018. It means that businesses will have to contribute to their employees’ pensions.
All employees will be automatically enrolled unless they choose to opt out. If you don’t comply, you could end up with heavy fines or even imprisonment.
Confusion among SMEs
One of the survey questions was: “has your business already complied with pension auto-enrolment?” 35% responded to say that they didn’t know what auto-enrolment was and 33% said that no they had not prepared.
Russ Morgan, founder of Bidvine.com said: “We wanted to get insight into what small businesses think about auto-enrolment seeing as it’s going to affect every employer in the UK. We were astonished to discover that many didn’t even know what it is!”
The survey asked respondents whether they thought there was enough information and support for small businesses regarding auto-enrolment. 65% said no, only 35% said yes. 66% said that they didn’t know the deadline for auto-enrolment, only 34% said that they did.
62% said that they think that the majority of their employees will not opt out of it. 43% said that they agreed with auto-enrolment being compulsory. 31% said that it should be up to businesses whether they contribute to their employees’ pension.
Whatever your opinion, it is compulsory. You’re also not allowed to persuade your employees to opt out, either with incentives or threats.
“We were pleased to see that most business owners agree that auto-enrolment is a good idea, however it is slightly worrying that 43 per cent said the extra cost will affect hiring new employees – something the government may have to consider in the future as it may affect employment,” said Morgan.
When do you need to start it?
The time each business needs to start auto-enrolment is dependent on how big the business is but the absolute deadline for everyone is February 2018.
Bidvine.com decided to create a handy guide on auto-enrolment with the help of the Auto-Enrolment Bureau in order to help small businesses out.
Morgan said, “It might seem like a way off yet, but as you will see in the guide we’ve created with the auto-enrolment bureau, business owners should start the process 6 months in advance in order to be compliant.
Are you prepared for auto-enrolment? Have you found it difficult to prepare? Please share your thoughts.
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About The Author
An experienced business and finance writer, sometimes moonlighting as a fiction writer and blogger.