Now: Pensions to add employer auto-enrol charge

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Automatic enrolment provider Now: Pensions is to introduce an employer charge of up to £40 a month from next year.

The announcement comes as the provider launches a month long consultation aimed at finding out the needs of small employers.

Concerns have been growing that firms yet to auto-enrol will have to turn to Nest as other providers struggle to make money out of the smaller firms.

Now: Pensions director of policy Adrian Boulding says the firm will use the research to improve services for small employers – such as giving each employer a dedicated member of support staff.

Existing clients will not be affected by the charge, even if they are staging in or after 2016, and the fee will be set based on the feedback from the consultation.

Boulding says: “We are going to charge employers. We’ve made a decision we want to remain open to all employers of all size and provide them with the help they tell us they need to help them manage auto-enrolment.

“But to do that we are going to levy a charge for new employers that join us from 2016.

“We don’t know what the charge will be yet, because we haven’t asked employers what services they want yet. But we are making a commitment today that it will be no more than £40 a month.

“We think it’s something that a small business – if they value the services – will be happy to pay. If we get the consultation right we will be delivering the services people have told us they need and would value.”

Boulding adds: “The majority of small employers do not have an adviser, many will use an accountant. They are expecting their pensions provider to help them with the day-to-day nitty gritty of things like filling out forms.

“We are trying to find out exactly what help small employers need – is it a call centre, or a named individual in a call centre or the ability to share computer schemes?”

In November 2014, Money Marketing revealed how rival provider The People’s Pension had held discussions over introducing an employer charge.

A spokesman for Government-backed scheme Nest confirms it is not planning to introduce a similar fee.

Last week, Now: Pensions announced it was opening a second office in Nottingham and employing 250 new staff to support businesses and scheme members.

It has previously been criticised over a series of failings following a switch of administration providers and its early exit fee.