New research has uncovered a staggering lack of engagement and knowledge amongst employers on Automatic Enrolment.
The survey, conducted by Defaqto on behalf of Now: Pensions, shines a light on the attitudes of employers, as seen by Independent Financial Advisers, towards Automatic Enrolment.
The survey of 264 IFAs found that:
- 89% of advisers are concerned employers lack the knowledge to make informed choices about the right Automatic Enrolment option for their employees
- 65% of advisers think employers are unengaged with Automatic Enrolment
- Advisers believe only 5% of employers are fully aware of their Automatic Enrolment obligations
The survey comes as the Automatic Enrolment bandwagon moves firmly into the SME community, with businesses employing between 50 and 100 people needing to comply over the next 12 months.
Whilst large businesses, who have already automatically enrolled their staff, were able to allocate significant resources to the task, which resulted in relatively low opt out rates of around 10%, many experts are concerned that smaller businesses will struggle to comply with the legislation, which could result in higher opt out rates and lower pensions for their workers.
The survey also asked advisers who should help to educate employers on their Automatic Enrolment obligations:
- 77% of advisers thought the Government should do more
- A similar number, 75%, believe The Pensions Regulator should do more
- 23% of advisers think pension providers themselves should be educating employers
Commenting on the survey, Morten Nilsson CEO of NOW: Pensions said: “Many employers will be approaching auto enrolment with trepidation. The advisory community has an essential role to play, guiding employers through the process and helping to ensure that the schemes they select for their employees are fit for purpose.”
Nilsson continued: “Providers, government and the regulator also need to work together to ensure that only high quality schemes with low charges are permitted into the auto enrolment marketplace. Employers would then be on a firmer footing to tackle auto enrolment with greater confidence.” (Source: Now:Pensions)
We are here to help
Complying with your Automatic Enrolment obligations is complex and time consuming.
Whether you have a simple question or would like to learn more about how we can help you comply, get in touch our team of advisers are here to help.
Give us a call today on 0115 933 8433 or email firstname.lastname@example.org