Half a million more SMEs to have auto enrolment duties than estimated
27 July 2015
According to recent analysis, more business start-ups and a lower number of closures mean around 500 thousand more SMEs will have automatic enrolment duties than previously estimated.
The new figures, published in The Pensions Regulator’s (TPR) third annual automatic enrolment commentary and analysis, show that a total of around 1.8 million small and micro employers will need to meet their pensions duties over the next three years, compared to the previous estimate of 1.3 million.
The estimates shows the summer of 2017 will see a peak of around 350,000 small and micro employers whose automatic enrolment duties will come into effect (compared to earlier predictions of a peak of around 220,000 in mid-2016).
The report illustrates changes and trends in the pension landscape and that saving for a pension is becoming the norm thanks to automatic enrolment. It shows that most employers are now choosing to use DC pension schemes with a relatively even split between trust-based schemes and contract-based schemes.
Other key information in the report includes:
- By the end of March 2015, a total of 5.2 million eligible job holders were automatically enrolled by around 50,000 employers. 74% were employed by large organisations, 25% by medium and 1% by small and micro employers.
- 68% and 64% of small and micro employers respectively plan to seek help with automatic enrolment from a business adviser with accountants and IFAs likely to be the most commonly used.
- Among small and micro employers who were due to reach their staging dates in June this year and who were surveyed two months before their staging date, 96% were aware of automatic enrolment and 89% understood them.
- Over the year, around half of all employers (52%) who have completed their declaration of compliance have used postponement.
- In the year to the end of March 2015 TPR used their formal powers on 1,941 occasions, in relation to 2,082 cases. They issued 1,518 compliance notices, 16 unpaid contributions notice and six statutory inspection notices.