The Government announced plans recently for all businesses across the UK to auto enrol their employees into a workplace pension scheme. But for some small and medium enterprises (SMEs) the set-up costs could cripple them.
The set-up costs for a small business are around £9,000, whereas a small to medium sized business (up to 100 employees) would be around £12,500. Larger firms with up to 250 employees would face costs of around £15,000, whereas huge companies employing over 500 staff members could see a bill of approximately £23,000.
But businesses in the UK will not have a choice as to whether they take part in the pension scheme as they are legally obliged to. Businesses don’t have to act now, but they will have to act within five years otherwise they could receive a fine.
But it is not only the costs that could cause some businesses difficulty. The paperwork required to enrol in the scheme is rather time consuming and according to research conducted by the Centre for Economics and Business Research (Cebr), it could take you on average over 100 days to complete.
Speaking of the workplace pensions scheme and impact on SMEs, David White, Managing Director of pension consultant, Creative Auto Enrolment, said: “Businesses must start thinking about what they need to do as soon as possible as they can’t escape auto enrolment. The staging dates for each business are coming and each and every company, regardless of size, will need to prepare.
“Hefty fines will penalise those who don’t meet their responsibilities in time. With the clock ticking, businesses need to start thinking now about what their duties are under the new legislation.”
Do you welcome the news of a pension scheme at work? Or do you think the set-up costs and time commitments could cause your employer some difficulty?
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