SME owners still lack pension auto-enrolment knowledge
One in three small business owners have said they still lack knowledge of pension auto-enrolment, despite an upcoming deadline, new research has revealed.
Of more than 2,300 owners quizzed by Bidvine.com, a third said that they did not know what pension auto-enrolment is, while two in five believe it will hamper their hiring processes.
By February 2018, auto-enrolment will be a requirement for all businesses but many owners have expressed concerns that the extra expenses could slow or inhibit growth.
As part of the plans, firms must contribute to the pension pots of all employees unless they choose to opt out.
While additional costs to businesses come with auto-enrolment, firms could face large fines and owners or directors could face imprisonment for non-compliance.
For the small businesses that operate on very tight margins, thought will be needed as to how best to overcome the situation.
Nearly two thirds of those questioned said they expect the majority of staff to stay ‘opted-in’ to the proposals next year.
The study suggests that many business owners feel there is a lack of information around auto-enrolment – 65% said there has not been enough support to help them.
For instance, only a third of those polled knew of the deadline in February, while a similar number voiced concerns that they should have more say into the amounts to be contributed.
Auto-enrolment dates have varied dependant on the size of businesses, but all firms must have the process completed by the deadline.
Business owners have been advised that the process can take up to six months to complete and that those that are yet to get going should consider it a priority.
For those fearing that being compliant could result in greater business costs, it’s important to assess the alternative finance options or methods of refinancing that might be available in the short term.
This should help to prevent any cash flow concerns and limit any potential negative impacts on hiring.
If owners fear that they have more profound financial issues, undertaking an independent business review may help to highlight them and suggest potential solutions.
By Phil Smith