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Experts warn Govt’s auto-enrol changes ‘heap pressure’ on providers

Government bids to ease auto-enrolment burden on small and medium-sized firms.

Pensions experts are warning Government changes to the auto-enrolment process “heap pressure” on providers rather than ease the auto-enrolment burden.

In a series of changes to employer auto-enrolment rules, published last week, the Department for Work and Pensions has increased the period from employees joining a firm to the first pension contribution being made from four to six weeks.

It has also changed the way pension contributions are calculated, which will now be based on a monthly average over a year to incorporate variable pay patterns.

The joining period window will increase on April 1, while changes to pension contributions come into effect on 1 November.

B&CE director of customer solutions Jamie Fiveash says: “While we welcome simplification, putting some of these into effect from November 1 will heap loads of pressure on providers to change their systems, with employers and advisers demanding the new way of working.

“Allowing some time to implement would have been far more sensible. This seems a largely political decision, and makes what should be a positive step, counter-productive. The last thing providers need is to be changing all their systems now.”

Legal & General pensions strategy director Adrian Boulding says: “The DWP is keen to help small and medium businesses but further legislative change won’t help, firms need to buy advice.”

The Federation of Small Businesses welcomed the move but said the DWP should go further to help small businesses. 

Murphy Financial associate partner Adrian Murphy says: “Cutting the administration burden helps but it is not ultimately going to ease the pain for small and medium businesses. They do not have the resources to bring in people to do it for them so it will be tricky.”


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There is one comment at the moment, we would love to hear your opinion too.

  1. For providers is this a business opportunity or an invitation to lose money?

    The only real help small firms will really want is to be excluded. Failing that they will probably be using nest and having a system of rolling opt outs. At least the longer time period will help that.

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