Third of small firms refuse to comply with AE

Almost a third (32pc) of small and medium sized businesses (SMEs) have admitted that they plan to ignore the forthcoming auto enrolment legislation. As a result, they could face fines of up to £30.4m per day.

Worryingly, two thirds (66pc) of SMEs have little or no knowledge about what the legislation involves, according to the survey of over 300 small businesses on behalf of employee benefits adviser Secondsight by Clarity Surveys.

This appears to be in stark contrast to research by The Pensions Regulator in August 2013, which indicated that “employers are beginning to recognise the need to allow time to plan for automatic enrolment”.

Some 38,000 British businesses will need to auto enrol their employees in company pensions next year and a lack of compliance could have serious financial consequences. With penalties for non-compliance of £2,500 per day for employers with 50 to 250 workers, escalating penalties could potentially reach £30.4m per day, said Secondsight.

Auto enrolment is set to be a serious regulatory burden for UK small businesses. A report by the Centre for Economics and Business Research (Cebr) recently found that it will cost British SMEs up to £28,300 per business and take up to 103 man days.

Read the Telegraph Online article in full which features details of Secondsight’s automatic enrolment research.