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 has discovered 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, 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 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’.
The survey also 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.
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) said yes, just less than a third 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