NEST Report Claims Fewer Firms Leaving Than Expected

By David Shirt

A report which shows that fewer employees are opting out of their workplace pension is yet another wake-up call for SMEs who are underestimating the huge administrative task that lies ahead with auto-enrolment – says a leading pensions lawyer.

In a recent survey, the National Employment Savings Trust (Nest) found that less than one in 10 (9%) of employees chose to leave pension schemes after being automatically enrolled. This figure is far lower than the expected figure with the Government predicting before the law was introduced last year that a third might decide to leave.

Auto-enrolment will mean that all UK employers must automatically place their entire workforce into a qualifying pension arrangement. All employers must contribute to that pension arrangement and must monitor and keep records of their workforce’s membership of the scheme.

The laws came into effect for the UK’s largest businesses last year and from April 2014, firms with a PAYE scheme size of between 160 and 249 will need to be ready. Firms with fewer staff members will be required to comply with the rules by a particular ‘staging date’ according to their size up until 2018.

The findings from Irwin Mitchell’s auto-enrolment survey can be downloaded here.

Read more about Irwin Mitchell's expertise in relation to SMEs and Pensions.