Thousands of small and medium sized businesses across the UK are heading towards a ticking time bomb. Why? Quite simply, they don’t have their pensions auto enrolment schemes up and running, and this will soon mean fines and penalties.
The auto-enrolment scheme was introduced by the Pensions Regulator in 2011, and it mandates that all employers (from the smallest to the largest) offer their staff a pensions scheme. They must automatically enrol all eligible staff (staff can later choose to opt out if they wish), and they must make contributions for all staff at the minimum levels set down in law.
While many businesses have already received their auto-enrolment staging dates and complied in advance, there are hundreds of thousands of small British businesses that have not yet done so. For businesses that did not receive a staging date, the default deadline for many of them is April 1, 2017. This date is approaching faster than you think.
The gradual roll out (from 2011 until 2017) was designed with small businesses in mind, ideally to give them more time to prepare. That said, there has been one unexpected consequence of the slower roll out - many small businesses are simply unprepared.
During the first 18 months of the new system (which launched in the autumn of 2012), only large companies were required to comply. Since many of these larger companies already had pensions schemes in place that fit the requirements (or only required a few tweaks to do so), the process seemed to be seamless and painless. But did this actually create a false sense of security for the rest of the country?
It seems like the answer might be a resounding, “yes.” Hundreds of thousands of small businesses are approaching the April 1, 2017 deadline without an auto-enrolment scheme in place. They have never before offered their employees a pension, and they are confused and intimidated by the process of setting everything up.
Whether the process daunts you, or you’re simply just putting it off because you think it can wait, you are running out of time. If you think that the Pensions Regulator will be lenient about this program, you are sadly mistaken – thousands of medium sized businesses (those with between 62 and 89 employees) have already been hit with penalties and fines. This is not going to go away – you cannot afford to procrastinate on your auto-enrolment tasks.
If any of this sounds familiar, you are not alone. If you own a small business, you still have some time before becoming vulnerable to fines. The Pensions Regulator has listed a massive number of penalties for non-compliance, and the fines get progressively larger and larger as time compounds.
Don’t get caught out. If you need help getting your pensions set up, contact Options Pensions Ltd. today. We offer excellent rates and friendly customer service, and we will ensure that you get your auto-enrolment scheme up and running before the deadline. Call or email us today.