It is widely accepted that most people are not saving enough for their retirement and this problem is compounded by the fact that we are living longer than ever and that we have a growing population. The consequence of this is that the State Pension is coming under strain and that is why the age at which people retire is being increased. However, that alone is not thought to be enough and new Auto Enrolment company pension legislation is being gradually phased in, which will lead to a stampede of business owners needing to comply.
Automatic Enrolment, or AE, is being phased in to give all employees access to a workplace pension scheme. Significantly, if they choose to contribute then their employer will have to as well. Until now only larger employers have had to comply but the onus is now starting to fall upon SMEs. In total, some 58 thousand businesses have so far gone through the process, but from January this will increase to 100 thousand per month until all of Britain's 1.8 million employers are compliant.
The date at which businesses need to be ready is known as their staging date. Failure to do so attracts a minimum fine of £400 and then £50 per day and there is growing concern that the impending deluge will result in a logjam. Early action is highly recommended to avoid the inevitable rush.
Both employer and employee contributions start at just 1 percent but then increases to 2 and then 3 percent in the near future. Opting to speak to a financial adviser could well prove costly and, it's worth remembering that most accountants won't feel able to advise either.
We at YBC have researched the market thoroughly and have a solution that ticks all of the boxes. It delivers compliance in a matter of days, offers a choice of schemes and is low cost. Contact us now to start your Auto Enrolment journey so you can avoid the stampede.