New pension rules come into force today but not all small businesses are as prepared as they should be.
Research by Now Pensions has revealed that 27% of firms have not given any thought to how they will arrange for a company to run a workplace pension for their staff.
From today small businesses employing up to 30 staff will gradually be obliged to offer their staff pensions under the auto-enrolment programme. That includes people who only employ one person such as a carer or a nanny. Under auto- enrolment all employees over the age of 22 who earn more than £10,000 a year will now have the right to a work place pension. The Pensions Regulator which oversees the programme says those who do not comply could receive a fine of £400. However it says it is working with 200 support organisations to make sure people get proper advice and so far escalating penalties have only been used on a handful of occasions.
So far, 5.2 million workers in 45,000 larger companies have joined the scheme. Between now and 2018 an estimated 3.8 million more workers will be enrolled by about 1.3 million employers. However anyone who took on an employee for the first time after 1 April 2012 will not have to pay pension contributions for another two years. Make sure you know what your obligations are. The Pensions Regulator has a step-by-step guide to automatic enrolment on its website. For more details click here.