It has been a year since pensions auto-enrolment rules came into force and we’re fast approaching the point at which small and medium sized businesses will be required to sign up their employees to pensions.
However a recent survey has indicated that one third of SMEs plan on ignoring the new rules. Research conducted by Clarity Surveys for Second Sight; found that two thirds of SMEs surveyed said they had little or no knowledge of the new legislation.
Around 38,000 SMEs will be required to auto-enrol their employees next year, with penalties of £2500 per day for those employing 50-250 workers that fail to observe the new rules.
Partner at Secondsight, Matthew Mitten said he was shocked by the findings from the survey. “We were very surprised to see the statistic on the number of companies that will refuse to comply,” he said.
“Of course not all non-compliant SMEs next year will receive an escalating penalty and the reality is that most still have enough time to plan but the figure we quote clearly demonstrates the lack of awareness around the fines and the enormous impact they could have on SMEs.
“Equally the lack of knowledge about the new rules and the timescales involved is a serious issue that needs to be resolved.”
Meanwhile research from Sage has revealed that almost two thirds of companies do not currently have a scheme in place, and over half expect an impact on their payroll. Almost 20 per cent anticipate cash flow problems as a result of the new legislation.
Jonathan Dowden, Sage UKI pension’s expert said: “The real challenge is getting the tens of thousands of businesses who are yet to stage up to speed and compliant.
“It is imperative they understand the need to build in increasingly larger amounts of contributions for their employees into financial forecasts to 2018 and beyond.”
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