The story so far
The Pensions Regulator has done a bit of a review on the story so far and if you are an employer who’s not yet reached their Staging Date you might want to pay some attention.
It’s very easy to put the issue on the back burner: the earliest staging dates for smaller organisations, those with less than 30 employees on their payroll in April 2012, will start from June 2015. Some newer employers won’t need to deal with auto-enrolment until 2018.
However, a lot of larger employees have already been through the process and have their Workplace Pensions Schemes up and running. The scary bit is that whilst the majority of these employers thought they were prepared for auto-enrolment, nearly 50% of them were not!
Will your business be bidding for help
Thousands and thousands of smaller businesses are yet to go through the funnel – let’s face reality – this is not an easy subject to grasp and can be complicated, not just in the preparation and registration stages, but also on an ongoing basis as staff change their status: age, rate of pay and hours worked – who’d have thought the Christmas bonus could be so problematic! Some of the smaller businesses have the issue in mind but no doubt many will wait until they have to do something about it.
The recommendation is that the planning is started 12 months ahead of your Staging date. However, with it being complex most of these employers will want help from an accountant or financial adviser to put things into place. The problem will be that these helpers will be a limited resource, and the laws of supply and demand will mean things are going to get pretty expensive as those employers leaving things until the last minute scramble for help to get them through the funnel before the fines catch up with them. Financial Advisers are already quoting high figures for advice and assistance and amounts upwards of £2,500 are commonly seen. I don’t think they’re going to reduce these fees if the demand increases; on the contrary fees could go much higher.
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Avoid the costly fines
Relax, everyone’s in the same boat so the Pensions Regulator will take a lenient approach?…… I wouldn’t count on it: the government is determined to make this happen: it can’t afford failure. To start with there’s a fixed penalty of £400, and potentially daily fines starting at £50 per day, increasing to £10,000 per day, depending on the number of employees the business has. That could add up to quite a considerable financial problem for any business, so take this seriously.
Surely there’s a simple and less costly way
Well yes, despite the messages often being bandied about, you don’t need a financial adviser unless you want advice on the investment. If you just want a scheme then and someone who knows what they’re doing to put everything into place on time, and to deal with all the administration and changes as and when they occur at a reasonable cost then you could try www.pennineaccounting.co.uk.
They have experience and expertise of the pensions, payroll, and accounting issues and for a low up-front cost they are a great option for a simple workplace pension scheme. You can contact them on enquiries@pennineaccounting.co.uk, or by filling in the contact form on their website, and why wait for the rush; get ahead and put your scheme in place early – there’s no additional cost. Pennine Accounting will give you all the help you need.
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