By Will Wynne, Managing Director of Smart Pension
Three years into what has been the most successful initiative in a long line of failures when it comes to urging the UK people to put aside their money for their retirement, auto enrolment has seen almost 5.5 million people automatically enrolled onto a workplace pension by nearly 61,000 employers. As a result, since 2012 when the new pension reform was introduced, there has been a 12% increase in the number of employees currently in an active pension scheme. It is estimated that between now and 2018, around 1.8 million employers will need to enroll their staff onto a qualifying pension scheme, and by the end of it, it’s estimated that around 9 million employees will be newly saving or putting aside more into their pensions. In 2016, employers with less than 30 employees will continue to hit their staging date and the numbers are expected to increase dramatically, from 46,000 in 2015 to more than half a million in 2016.
However, experts say that many small employers are still confused by what auto enrolment is. If you’re a small employer (one that perhaps hires a nanny or a personal assistant/carer) who have yet to enroll your company and are due to stage within the next few months, then the advice is to start taking action immediately. Many small and micro employers will likely seek the help of advisors with expertise when it comes to pensions, to assist them with their workplace pensions duties. With the anticipated numbers of employers reaching their staging date in 2016, advisors may likely reach their capacity, so there’s a risk of things slipping through the net and subsequently missing the all important staging date deadline. Even if you plan to do it yourself, be cautious of the fact that there will be thousands of others going through the same process, all needing advice and guidance and probably be also seeking that advice from pension providers and The Pensions Regulator so there will likely be a huge backlog.
Another reason for the need to start as early as possible is because there are an increasing number of providers out there all offering a slightly different proposition and where it isn’t as straightforward as choosing to go with a provider purely based on the offer that’s cheapest or perceived to be the best value. Allow yourself time to look at the overall offers and compare them to find the best provider. Using an impartial, independent financial research body such as Defaqto is a great way to compare pensions products and providers, and quite quickly too, helping to take the legwork out of what could become an arduous task.
Smart Pension is one of the few platforms that guarantees to accept every UK employer and employee which will be vital in tackling the influx of employers yet to enrol their business onto a pension scheme. We’ve been awarded a 5 Star Rating, Defaqto’s highest score, meaning that the Smart Pension offering is one of the most comprehensive schemes available, and it also provide free, useful tools for employers such an auto enrolment planner and an interactive penalties guide. Smart Pension is free for employers, charging them no setup fee and no ongoing fee.