Small firms struggle with workplace pensions

A survey by the Federation of Small Businesses (FSB) has found that nearly half of the employers who must set up a workplace pension scheme for their staff in the next two years are confused about their responsibilities.

The FSB’s survey revealed that 45 per cent of those asked were unclear on the rules relating to workplace pensions, while a further 25 per cent of those surveyed also feared that their business might not be able to cope with the extra cost.

Among businesses yet to stage, the top three sources of information and support they expect to turn to are their accountants (56 per cent), the FSB (37 per cent) and the Pension Regulator website (33 per cent).

Since 2012, 5.4 million workers have been signed up to a workplace pension under the auto-enrolment programme and millions more small businesses still need to enrol employees automatically into a workplace pension scheme before the scheme’s final deadline in 2018.

All employers are being warned that they need to offer pensions to anyone who is over the age of 22 and earns more than £10,000 a year. Employees who do not wish to receive a workplace pension may opt out. The rules affect all employers including those who only have a single member of staff.

John Allan, Chairman of the FSB, said: “Our message for small employers is auto-enrolment is coming and will affect your business – and the sooner you get to grips with what you need to do, the better off you will be.

“Most of the businesses which have already set up a workplace pension told us they found the process fairly straightforward, but we know many remain concerned about their ability to cope. These businesses should feel reassured that there is plenty of information and support available to help them through this process, both through the FSB and from the Pensions Regulator.”

The FSB also said that employees should pay attention to their rights and ensure they are being given the appropriate pension provision and contributions.

Link: FSB Study