A surge in activity in the auto-enrolment pensions market means the clock is well and truly ticking for the 1.6 million SMEs required to enrol into a scheme over the coming four years.
According to a report from Lighthouse Group, July was the beginning of a particularly busy period, and activity is expected to remain high until at least November.
In this financial year alone, 32,000 SMEs with 50-249 employees must enrol into workplace pensions, and many are leaving it very late to do so.
Over the next four years, 1.6 million SMEs must enrol into pension schemes – and for those that are the last to do so, that is a very long queue indeed.
Lighthouse Group are telling business leaders to begin enquiries as far as 12 months in advance of their auto-enrolment deadline, but the message is still not getting through in some places.
CEO Malcolm Streatfield said: “Many businesses are not leaving themselves enough time to prepare, even though they are aware of their auto-enrolment timelines.
“A common mistake by employers is the assumption that their existing accountants or payroll provider will provide the necessary advice or support and a ready-made solution.”
In practice of course, this is not the case; and there remains the looming risk of popular schemes becoming full up or over-subscribed, leaving latecomers to pick off the scraps.
On top of this, there is the need to compile the necessary data about employees, so they can be enrolled into schemes in their own right.
“Many have simply not factored in the length of time it takes to gather the correct personal data of employees and get their payroll systems into shape, which is a mandatory requirement to begin the process,” Mr Streatfield warned.
By acting early, businesses can access the best schemes without running the risk of the market running out of capacity – and in turn, the market can adjust to any capacity concerns so that there are no disasters on the final deadline day.