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Employee Benefits News

Latest News
22 Jul 2013

UK Small Businesses Unprepared For Auto-Enrolment

A large proportion of small and medium-sized businesses (SMEs) in the UK are not ready for automatic enrolment 12 months ahead of the deadline. This may result in significant fines for non-compliance, recent survey of 275 SMEs by law firm Irwin Mitchell has suggested.

During this summer, UK businesses employing between 2,000 and 4,000 people will have to comply with the law, whereas April 2014 is the deadline for companies with between 160 and 250 employees. Smaller firms will be expected to comply over a couple of stages by 2018.

Despite the fact that deadlines are coming closer, four in ten of the respondents say their payroll systems are non-compliant at present. The main concern for small and medium businesses is the additional cost that auto-enrolment is going to incur, with three in five still not having budgeted for those expenses and 40% admitting they may not be able to afford it. Back office administration is also seen as a key challenge, Irwin Mitchell found.

As many as four in five SMEs claim they have started their auto-enrolment preparation. Yet the overall lack of preparedness can also be seen in the fact that 60% of those polled have not checked what pension provisions are featured in their staff contracts, and have not evaluated their impact on plans for auto-enrolment.

Meanwhile, a quarter of respondents say they do not offer pensions to their staff, and more than one in three claim that the scheme they operate is non-compliant with auto-enrolment.

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