Auto-enrolment update – The calm before the storm

By Jamie Clark, Business Development Manager

It seems that auto-enrolment has been relatively successful so far:

  • Figures from the Pensions Regulator show that since the start of auto-enrolment, over 60,000 employers have put more than 5 million members of staff into a workplace pension.
  • The adviser and pension provider markets have so far managed to keep up with demand and most employers have fully complied with their auto-enrolment duties.
  • But some employers have struggled and have been subject to compliance action.
  • Up to the end of September 2015, more than 3,000 of the Pensions Regulator's powers have been used, including 582 fixed penalty notices of £400 each.

The real challenge will come over the next two years or so when around 1.8 million employers reach their staging date.

In that number will be lots of small employers with only a few members of staff. As a result, it is likely that the provider market will contract for these smaller employers as they are not financially viable for some pension providers.

In addition, it's likely that the Regulator will need to use its powers more often as smaller employers are less likely to have access to the advice they will badly need.

In an attempt to help employers, the Department for Work and Pensions has recently started a new education campaign, “Don't ignore the workplace pension”, to educate employers that they need to give themselves plenty of time to plan for auto-enrolment.

So with 2015 behind us, we can say with some certainty that auto-enrolment has been relatively successful. But with so many employers yet to stage, it could just be the calm before the storm.

Sources:

  • Automatic Enrolment Compliance and Enforcement: Quarterly bulletin 1 July – 30 September 2015, October 2015, The Pensions Regulator
  • Workie says: 'Don't ignore the workplace pension', 21 October 2015, The Pensions Regulator

Recommended

14

The big question: Does the advice gap really exist?

Advisers and industry experts have called into question what is thought to be one of the most fundamental negative outcomes to stem from the RDR – the creation of an advice gap. The advice gap, defined as those who cannot or will not pay for full regulated advice, has been widely accepted as an inevitable […]

Portfolio-Bonds-Investment-Business-700x450.jpg

Liontrust shuts bond fund after managers quit

Liontrust Asset Management is to shut down its GF Global Strategic Bond fund in the wake of the resignation of the portfolio’s co-managers Michael Mabbutt and Felix Martin. Dealing in the £33m Dublin-based vehicle was suspended on 15 January and it is set to be wound up on 29 January, after which all money will […]

carltonhood
1

Old Mutual Wealth directors exit

Old Mutual Wealth chief information officer Jeremy Charles and customer director Carlton Hood are stepping down from their roles. Charles is to retire in the first half of this year, which the firm says was agreed when he joined in 2012 while Hood’s role is to be made redundant. Hood – a former Channel 4 presenter […]

Money-Currency-Coins-Pound-GBP-700.jpg
2

Auto-enrol commission ban to cost advisers over £1m a year

Advisers are set to lose £1.16m a year as the Government turns off commission on occupational schemes used for auto-enrolment. In the Department for Work and Pensions’ response to its consultation on banning member-borne commission, it confirmed the ban would come into force for new arrangements from April 2016. It will consult later in 2016 […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment