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Small businesses rising to auto-enrolment challenge
Employers are meeting their duties without needing to call their pension scheme

New figures show that the early-staging small and micro employers are ‘defying expectations’ by navigating auto enrolment waters far more smoothly than anticipated.

Figures from the national defined contribution workplace pension scheme NEST suggest that small employers are meeting their duties without needing to call their pension scheme or use their waiting period as much as larger employers.

Smaller employers tend to have simpler worker set-up and payment processes than their larger counterparts and as a result are likely to set up with just one group of workers, and one payment source.

In addition, smaller employers are less likely to use their waiting period, compared to their larger counterparts.

Almost half (44 per cent) of the employers that staged in the summer of 2014 enrolled their first workers in the three-month period after their staging month, indicating that many were using waiting periods to postpone their duties.

This reduced to 29 per cent for small businesses and 26 per cent for micro-businesses, indicating that they are getting on with auto enrolment without delay.

Small and micro employers are able to set up and use NEST with less need to call the provider than the employers that staged in the summer of 2014.

When comparing the sign up and initial setup process, small and micro employers say they call NEST about half as much as 2014 stagers.

When asked, 27 per cent of small and micro employers say they did not call at all. Calling is even less likely among micro employers, with 41 per cent claiming they did not need to call NEST. 

A significant majority of small and micro employers (72 per cent) say they expect to rarely or never call NEST in the future. Most expect managing auto enrolment to be very easy and not time-consuming in the years to come.

Helen Dean, CEO of NEST says, ‘These are the first insights of their kind. We’ve looked at the real experiences, thoughts and behaviour of small and micro employers as they navigate their way through auto-enrolment. Did they struggle? Did they fail? Is auto enrolment too much for small and micro employers?

'Our figures show that concerns are largely unfounded. Defying expectations, small and micro employers are rising to the challenge and meeting auto enrolment head-on.’

Further reading on pensions

See also: How to reduce your tax bill

Related topics: Pension schemes

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