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Whitehill Business Services Ltd >> news >> latest news >> Are Small Businesses Scared of Auto-Enrolment?

Are Small Businesses Scared of Auto-Enrolment?

Posted by on April 8, 2015

Company owners are beginning to suspect that any pay rises in the future may be affected by the new workplace pensions being put into place.


With almost 20,000 small businesses just about to start the staging process, the onset of automatic enrolment into a workplace pension means that just over 40% of those employing under 5 members of staff are fearful of restricting raises in pay and bonuses.

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Furthermore, 72% of staff employed by companies with less than 50 staff are concerned that their future development/pay rises may be affected as a result of putting in place a workplace pension (according to independent research findings from Enrolsme).


An alarming figure of 21% of small businesses with 1 – 5 employees think that automatic enrolment could even put them out of business. As a result of this, 36% of companies with under 5 members of staff claim that they will need to increase the costs of their services to accommodate automatic enrolment with another 48% being unsure still.


Director of Enrolsme, Matthew Mitten, has said “These are very worrying figures and trends, given small businesses have been and will continue to be the lifeblood of the economy. Employment in this sector could be affected with 1/3 claiming that they won’t be able to afford any new staff and almost one fifth telling us they will have to reduce their investment plans.
'However, even more concerning is the portion of small companies that believe automatic enrolment could see them going out of business altogether. This was certainly not the goal of the legislation. These are tricky times for small business in the UK and more should be done to help support them.'


The survey also highlights that 31%, nearly one third, of employers still don't know what automatic enrolment is. This figure increase to a larger 37 per cent in companies with 5-10 staff.


More than 90 per cent of employees are in favour of automatic enrolment, with 86 per cent of people worrying about having enough money to have a comfortable retirement.


Of the 69 per cent of businesses that are aware of automatic enrolment, 70 per cent still don't know when their staging date is. This increases to 79 per cent for those employing 1-5 staff.


If you would like to find out more about preparing for auto-enrolment, head to the pensions regulator website.