View more on these topics

SMEs warned over auto-enrolment non-compliance bills

Small firms could be hit with bills totalling tens of thousands of pounds if they fail to comply with their auto-enrolment duties on time, Standard Life warns.

New analysis from the provider lays bare the potential cashflow nightmare facing SMEs if they are late setting up a compliant auto-enrolment scheme.

According to the insurer, a company with 250 employees that is three months late meeting its auto-enrolment duties will face a bill of £34,000 on average for backdated employer contributions.

A firm with 100 employees in the same situation would have to pay over £13,000 in contributions, while a firm with 50 employees would need to cough up almost £7,000.

Standard Life head of workplace strategy Jamie Jenkins warns these costs could spiral further if The Pensions Regulator intervenes and uses its powers to force small firms to pay outstanding employee contributions.

He says: “If an employer is beyond three months late, The Pensions Regulator can force them not only to pick up the contributions they have missed but also the employees’ contributions.

“For a small employer that could cause a serious cashflow issue, particularly if the reason they have not complied in the first place is because they have run into financial difficulty. This could compound that problem.

“It is an issue we are worried about because we are still uncertain where employers due to stage this year are in terms of preparation.”

Jenkins says employers who miss their staging date and seek advice could also see their costs ramped-up as they are treated as “distressed purchasers”.

He says: “Anecdotally, employers who approach advisers late in the day to help them with auto-enrolment are being charged a lot more.

“That is understandable because advisers have limited capacity and to get a firm compliant in a short timeframe costs time and money.

“We have seen examples of fixed auto-enrolment fees increasing from £5,000 to £20,000 because the employer has become a distressed purchaser.”

Last month, Money Marketing reported concerns from a number of providers that auto-enrolment was at risk of “falling over” because up to a third of employers who should have set up compliant schemes in April and May have failed to do so.

However, The Pensions Regulator sought to allay these fears, saying predictions of mass non-compliance were “unfounded”.


Long term care 750 x 400

Lack of direction: Govt’s guidance on long-term care advice falls short

The Government is being urged to set out best practice guidelines for local authorities amid fears current rules will not encourage the public to seek information and advice on long-term care funding options. Policymakers have proposed introducing a requirement for councils to signpost those funding their own care costs towards financial advice. Getting it right will […]


Outsourcing: Which model works for your clients?

Centralised investment propositions that may include outsourcing to discretionary fund managers have to be personal enough to suit the individual needs and objectives of clients, so they are not shoehorned into unsuitable investments. Yet from a compliance perspective, a systematic approach needs to be taken to ensure consistency, so clients with similar needs and circumstances […]


People on the move

Platform provider Parmenion has appointed Richard Goodall (pictured) as a partner. Goodall leaves his position as SEI UK business transition managing director to take responsibility for sales and marketing strategy at Parmenion. He was previously sales and marketing director at Ascentric and held the same role at 1st The Exchange from 2005 to 2009. Former Institute […]


PI insurer enters adviser market with price pledge

A new professional indemnity insurer has entered the financial adviser market with claims it can halt the trend of escalating premiums. In recent months, advisers have reported increases in PI insurance premiums of between 40 and 50 per cent. Hoyl Underwriting Management says it will offer discounted premiums to firms which can prove they have […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm