Small businesses not prepared for pension reforms
By Francesca James
Almost two-thirds (65%) of the UK’s small businesses are no nearer to enrolling their staff in a workplace pension scheme required under new legislation, according to a new report from the Chartered Insurance Institute (CII) called “Advice Needed!”.
The research, conducted among 500 firms with up to 49 employees, shows that 42% have not thought about the new regulations for automatically enrolling staff in a pension scheme. In addition, nearly a quarter (23%) - though considering the regulations - are yet to take action.
Most businesses of this size (59%) know little or nothing about the pension reforms - which begin to take effect for large firms from October 2012 - with only 12% claiming to know a lot about them and a mere 8% having an implementation plan in place. Such low levels of knowledge and activity may reflect the now extended pension reforms’ “staging dates” — from June 2015 to April 2017 — stipulated for the UK’s smallest businesses.
Currently, 6 out of ten firms employing fewer than 50 staff do not offer their employees a workplace pension scheme, with just 27% making a provision for both full and part-time staff. And the gap between small firms (10-49 staff) and micro businesses (1-9 staff) is stark, with 65% of the latter offering no pension scheme at all.
The research shows that financial advice could be key to successful implementation. Of those companies (13%) that have already begun the planning process by seeking external assistance, more firms (46%) have chosen to consult a financial adviser rather than their accountant, pension provider or the Department for Work and Pensions.
David Thomson, director of policy and public affairs at the CII said:“To be fully prepared for the pension reforms, businesses need to decide what pension scheme they will offer their employees, how they will... continued on page two >