For immediate release: Wednesday 22nd October
With 1.2 million small and micro businesses set to begin staging from June next year*, new research conducted by independent financial researcher Defaqto on behalf of NOW: Pensions, reveals that these employers could be heading towards a pensions disaster.
Nearly three quarters (72%) of advisers say employers are coming to them for advice either very close to, or after, their auto enrolment staging date, while the majority (87%) are concerned that employers lack the knowledge to make informed decisions on the appropriate auto enrolment solution for their employees.
Of the 244 advisers questioned by Defaqto, half (50%) say firms have turned to them very close to their staging date, while 22% say they’ve had firms approaching them both very close to and after their staging date.
Morten Nilsson, CEO of NOW: Pensions said: “While auto enrolment has been successful so far, it is important that smaller employers and the industry do not get lured into a false sense of security.
“As small and micro companies begin to tackle the complexities of auto enrolment, many will lack the know-how, experience and resources required. While it is fairly common for employers to come to us late in the day or after their staging date, we urge those who will begin staging next year, to plan ahead. We are of course happy to accept latecomers and will do all we can to get them back on track, but in the case of auto enrolment, it is worth remembering that a little planning goes a long way.”
Over half (51%) of advisers say the volume of auto enrolment business they’ve received to date is as expected, while 6% say it’s more than expected and nearly a third (31%) say it’s less than they hoped. However, looking ahead, half (51%) are confident that auto enrolment represents an opportunity for them to grow their business.
Scott Gallacher, Chartered Financial Planner at Leicester based IFA Rowley Turton said: “To date it has been the larger employers that have been hitting their staging dates; consequently it is frightening that NOW: Pensions has already experienced some of them failing to put in place an appropriate scheme in time.
“If these larger employers with well-resourced HR departments can’t adhere to the rules, it does not bode well for 1.2 million of the UK’s small and micro businesses.
“Unfortunately auto enrolment is not something employers can just ignore, and with a predicted capacity crunch looming as traditional pension providers shun the smaller end of the market, and many financial advisers choose not to advise on auto enrolment entirely, smaller employers need to act now to avoid potential non-compliance fines of £500 per day.”
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For further information:
Tel: 020 3640 9075
Tel: +44 207 566 9720
Notes for editors:
Research conducted online by Defaqto in August 2014.
*Source: Department of Business, Innovation and Skills
NOW: Pensions www.nowpensions.com
NOW: Pensions is an independent, multi-employer trust serving thousands of employers and hundreds of thousands of employees from a wide range of sectors.
A subsidiary of one of Europe’s largest pension funds, Danish pension scheme ATP, NOW: Pensions offers a simple and cost effective workplace pension solution direct to employers and via advisers and the payroll sector.
In April 2013, NOW: Pensions became the first master trust to attain the NAPF’s new PQM Ready Standard. The benchmark shows employers that NOW: Pensions is a well governed pension scheme with low charges and good member communications.
The NOW: Pension Trustee Directors, whose role is to safeguard the interests of members, comprises well-known industry figures with different areas of expertise:
- Jocelyn Blackwell, founding partner Dunnett Shaw
- Christopher Daykin, former Government Actuary
- John Monks, member of House of Lords and former General Secretary of ETUC and TUC
- Win Robbins, former Head of European Fixed Income at Barclays Global Investors
- Nigel Waterson, former Shadow Pensions Minister
Charges are just £1.50 per month administration charge (reduced administration charge of £0.30 – £1.00 to be applied during auto enrolment phasing for lower earners) plus a 0.3% annual product investment management charge, with no hidden charges.
Defaqto www.defaqto.com/advisers @DefaqtoAdviser
Defaqto is an independent researcher of financial products, focused on providing intelligence to support better decision-making. At its heart is the UK’s largest retail financial product and fund database which it maintains by collecting data from across the whole market, and uses its expertise and insight to analyse this data and make it comparable.
From this, Defaqto creates a range of products and services – ratings, software solutions, consultancy services, data services, and publications and events – to deliver this information in a meaningful way. Defaqto’s intelligence facilitates better financial decisions and greater effectiveness in the creation, management and distribution of financial products.