Firms yet to roll out auto-enrolment to their employees have called for a delay to their staging dates until there is more clarity on the Budget changes.
Based on a survey of 414 companies carried out by the Association of Consulting Actuaries, 98 per cent of small and medium-sized firms say they should not have to auto-enrol staff while legislation introducing changes to pension funds charges and new freedoms has not passed through the House of Commons.
However, nearly six in ten employers were supportive of the Government’s freedom and choice agenda.
The survey also revealed the vast majority of firms were planning to use Nest as their auto-enrolment scheme.
Some 57 per cent of employers with between 10 and 49 members of staff expected to use the Government-backed provider, as did 70 per cent of employers with fewer than 10 employees.
A further 54 per cent of the smallest employers were unaware of when their staging date was.
ACA chairman David Fairs suggests the Government might need to consider “financial incentives” to help SMEs struggling with the costs of auto-enrolment.
He says: “In the longer term the ACA is of the view that average pension and savings rates must increase so more people enjoy a comfortable income in part or full retirement, so we support initiatives such as auto-escalation and extension of contributions to all earnings up to a ceiling. But in the near term the Government may need to be pragmatic and consider financial incentives to deliver the desired policy outcome.”