Three quarters of small companies in South Yorkshire have raised concerns that a new Government-enforced pension scheme will put too much strain on their business.
Over the next two years more than a million small and medium enterprises will need to set up a workplace pension for their employees under the Government’s automatic enrolment rules. January sees the number of employers reaching their designated staging date – the date on which they need to start complying with auto-enrolment – rapidly ramp up with tens of thousands ‘staging’ each month in 2016 and 2017.
But new research by the Federation of Small Businesses has revealed 45 per cent of small and medium enterprises in the region are without a pension plan for employees.
The study also found that although smaller firms generally believe ‘auto-enrolment’ will be good and that workers should save for the future, many are still unclear what they need to do, when they need to do it, and how much it will cost. Three in four business owners - 76 per cent - added that auto-enrolment pensions put too much pressure on businesses like theirs.
When asked how they accommodated the cost of setting up a workplace pension, 70 per cent of businesses which had already done so said they absorbed the expense into operating costs or accepted lower profits.
Gordon Millward, FSB regional chairman, 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. These businesses should feel reassured that there is plenty of information and support available, both through the FSB and from the Pensions Regulator.