There is less than one month to go before thousands of small businesses in the UK will have to offer staff a workplace pension for the very first time.
Automatic Enrolment will mean businesses now have legal duties to help staff save for their retirement, with the responsibility falling with employers to comply.
In 2010, the Government introduced the Pension Act 2008 which requires employers to automatically enrol all eligible staff on to a workplace pension scheme.
Starting with larger businesses first, more than 37,000 employers in the UK have complied with the new regulations. From April 2015, that extends to companies with fewer than 50 workers with an estimated 36,000 businesses set to stage this year, and this increases even further to more than half a million in 2016.
The recent annual insight report by Nest found support among small businesses for Automatic Enrolment remains high, and saving for their future remains in the top three spending priorities for consumers.
The challenge for many businesses, will be having to manage setting up and running a pension scheme for staff for the very first time. As a result Sage UK and Ireland is advising businesses to take at least a year to prepare for the new regulations.
Jonathan Dowden, Pensions Expert at Sage UKI said: “We have spoken with our customers and we understand it will be daunting to know how to go about complying with new regulation on a subject that has never affected your business in the past. However, getting to grips with it now will save an awful lot of pain in the long run.
“Improving efficiency will help to reduce the time and money you spend on Automatic Enrolment. Having the correct software can help take care of the heavy lifting by simplifying processes and cutting down on the administrative burden.
“On top of this, it is the business owner’s responsibility to properly communicate the changes to employees. It is vital that businesses do not point employees in any particular direction, only make them aware of their options and offer a work based pension.
“All employees have the right to opt-out of Automatic Enrolment, though opt-out rates so far have been lower than expected.”
Want to start preparing for Automatic Enrolment? You can find out your staging date by visiting the Pensions Regulator website.
You can also download Sage’s free guide to Automatic Enrolment here.