A recent survey of more than 2,300 small businesses in the UK reveals that a third do not know what pension auto-enrolment is, and more than two fifths say the extra expense will affect hiring new staff. Auto-enrolment will be mandatory for all British businesses by 2018, where business owners will have to contribute to all of their employee’s pensions unless they opt out.
A national survey of 2,319 British small businesses discovers that more than a third (35 per cent) do not know what auto-enrolment is and more than two fifths (43 per cent) of respondents answered that the expense of contributing to employee’s pensions will affect hiring new staff.
The survey was carried out by online local services marketplace, Bidvine.com, which asked its registered small business owners a series of questions on auto-enrolment.
The new legislation will force all businesses in the UK to contribute to their employee’s pensions, by February the 1st 2018 at the latest. All employees will be automatically enrolled to their work pension scheme unless they choose to opt out. Noncompliance can result in hefty fines and even imprisonment for business owners and directors.
When asked ‘has your business already complied with pension auto-enrolment?’ more than a third (35 per cent) of respondents didn’t know what auto-enrolment was, a third (33 per cent) answered no.
More than two fifths (43 per cent) of respondents answered that the expense of contributing to employee’s pensions will affect hiring new staff and almost two thirds (62 per cent) think that the majority of their staff will stay ‘opted in’.
Bidvine.com asked respondents if they think there has been enough support and information for small businesses about auto-enrolment, more than two thirds (65 per cent) answered no, compared to just a third (35 per cent) who said yes.
In response, Bidvine.com has teamed up with Auto-Enrolment Bureau to create a handy guide on what small businesses need to know about auto-enrolment.
Two thirds (66 per cent) of respondents didn’t know the deadline for auto-enrolment compared to just more than a third (34 per cent) who did.
When asked if they agree with auto-enrolment being compulsory, more than two fifths (43 per cent) say yes, just less than a third (31 per cent) think it should be optional whether businesses should contribute to their employee’s pensions.
The size of the business and when it started to pay employees will affect when the government requires it to auto-enrol, but the absolute cut off point for all businesses is February next year.
Bidvine.com co-founder, Russ Morgan says, ‘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! 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.
‘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.’