Three in four small business owners say that the government’s new rules surrounding workplace pensions put “too much pressure” on businesses of their size, according to a new survey out today from the Federation of Small Businesses (FSB).
After polling more than 1,000 small business owners in November and December, the FSB found that nearly half of firms without a workplace pension scheme are still unclear what they have to do in order to comply with the new auto-enrolment rules. One in four said they did not know their staging date.
The FSB also found that firms were underestimating the costs of implementing auto-enrolment schemes, with small business owners who had yet to set up schemes estimating overall costs to be, on average, £903 – far less than the £1436 average in overall costs reported by businesses that had already introduced workplace pensions.
“Our message for small employers is auto-enrolment is coming and will affect your business – and the sooner you get to grips with what you need to do, the better off you will be,” said FSB national chairman John Allan.
“The government must continue to monitor the roll out of auto-enrolment closely and take steps to lessen the burden on smaller businesses where possible,” Allan added.
Meanwhile, a separate report out this week argued that new pension freedoms are leaving a “whole generation unprepared” to manage their finances. According to a survey conducted by Unbiased.co.uk, a database of financial and legal advisers, just under one-third of people over the age of 55 said they fully understood what was involved in withdrawing their pension as a lump sum. Nearly two-third of over-55s said they are “not confident” that they can draw their pension without seeking professional advice.