More than 1 million small businesses will have to set up a pension for employees under new rules.
Put simply, the government wants everyone to have a sufficient amount of money so they can look after themselves following retirement.
George Osborne and David Cameron decided that auto enrolling people into a pension scheme is the best way to ensure the above happens.
Research by the Federation of Small Businesses claims that many small businesses remain unclear on what exactly they need to do under ‘auto enrolment’.
The organisation has also been urging small employers to get to grips with auto-enrolment – not just soon, but now.
John Allan, FSB national chairman, was quoted as saying the following in the press last month.
“Our message for small employers is that 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,” he said.
“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.
“The government must continue to monitor the roll-out of auto-enrolment closely and take steps to lessen the burden on smaller businesses where possible,” he added.
At Pareto FP, we know full well that people are living longer. That means the age at which staff retire is being pushed back and that pension schemes are becoming increasingly important to British workers.
Getting the most out of pension schemes is therefore incredibly important. Pareto can help with this, due to our decades of experience in advising companies on employee pension plans and breaking down the pros and cons of any given scheme in a simple and straight forward way.
The staging date is an important part of auto enrolment. For companies with fewer than 30 employees – with the last two characters in their PAYE reference numbers 00, 05-07, E1-E9, EA-EZ – the deadline to enrol passed on February 1.
March 1 is the deadline for firms with fewer than 30 employees, with the last two characters in their PAYE reference numbers 01, 08-11, F1-F9, G1-G9, FA-FZ, GA-GZ.
Between now and February 1 2018, a number of other deadlines dates for auto enrolment are in place, dependant on the size of your PAYE scheme and PAYE reference.
According to the BBC 5.4 million workers have been signed up to a workplace pension under the auto-enrolment programme.
So far employers have signed up in stages, but in two years’ time that journey should be complete for everyone.
What’s important now, is for employers to get good advice so employees can register with the appropriate pension scheme.
If you’d like to learn more about our pension advisory services, get in touch with Pareto for an informal chat about how we can meet the specific needs of your business.