Auto-enrolment has been advertised all over the media recently with famous people saying ‘I’m in!’, as the Government advertises the new laws regarding putting money into pensions. It is the Government’s attempt to make us all put money away for our retirement.
They are reacting to the fact that we are all living longer and as a nation we are having smaller families. This means there are fewer people in the working population, looking after a growing number of pensioners.
Some would say that the reform of how we save for our retirement is long overdue, with reportedly less than a third of us saving for our old age. However, it may well give employers a few headaches along the way.
There are thought to be in excess of 1.1million businesses that will be forced to set up a pension scheme for their employees. Each employer will be given a date according to the size of their business called a staging date, by which they will need have an appropriate pension scheme in place.
The worry is that many of these companies will leave it until the last minute, which would mean that Financial Planners and Insurance Companies may well be swamped. This could leave smaller employers struggling with the legislation without support. This means that the best time to start the process is sooner rather than later.
Employers will have to decide whether to take advice on setting up a company scheme or to cope with the administration of their pension scheme themselves and use a scheme like NEST. It really is a case of ‘employers beware’, as there are hefty fines if they get it wrong!
We have a proven track record in researching, planning, implementing and administering Group Pension Schemes. If you are interested in employee benefits and Financial Planning for your business give us a call, we can talk to you about a bespoke Corporate Service.