Nearly half of small businesses subject to auto-enrolment are unclear on the rules, according to research from the Federation of Small Businesses.
Around 45 per cent of 1,000 firms surveyed did not understand their responsibilities, the FT reports.
The research also found that 25 per cent of small businesses were worried they could not afford auto-enrolment, while three-quarters believed the reforms would put “too much pressure” on their businesses.
While large firms have already been through the auto-enrolment staging process, the next two years will see smaller business caught by the rules.
FSB national chairman John Allan says: “Our message for small employers is auto-enrolment is coming and will affect your businesses – and the sooner you get to grips with what you need to do the better you will be.
“Most of the businesses which have already set up a workplace pension told us they found the process fairly straightforward, but we know many remain concerned about their ability to cope.
“These businesses should feel reassured that there is plenty of information and support available to help them through the process.”
In his Autumn Statement speech in November Chancellor George Osborne delayed two planned increases in auto-enrolment minimum contribution rates, saving the Treasury £840m.
Under previous plans minimum contributions would have risen from 2 per cent of qualifying earnings, to 5 per cent from October 2017 and to 8 per cent from October 2018.
Now the rise to 5 per cent will take effect from April 2018 and to 8 per cent from April 2019.