SMEs Discovering Benefits Of Pension Auto-Enrolment

Number Of SMEs Believing AE Is Beneficial Doubles After Implementation

20.04.2015

SMEs are finding more benefits to pension auto-enrolment (AE) than initially expected, with approval of the scheme rising sharply among firms who have begun to implement it, new research has found.

Barclays Corporate & Employer Solutions polled over 2,000 SME decision-makers and found that companies that have implemented the scheme are mostly finding it to be beneficial. Only a quarter (25%) of companies thought AE would be beneficial before implementation, rising to almost double that (54%) after the staging process was complete.

Benefits seen by SMEs include improvements in employee engagement and productivity, attraction of new staff, and retention of existing employees.

Younger business owners, aged 25-34, are more likely to support AE, with 46% of the age group behind it, compared to a significantly lower 31% for owners aged 35-54.

However, the process is not entirely straightforward, with three-quarters (75%) of SMEs requiring some form of external support to implement AE.

Grant Hughes, head of SMEs at Barclays Corporate & Employer Solutions, said: "It is encouraging to see so many businesses realising the advantages of auto enrolment after implementation.

"While workplace pensions have clear benefits for employees, they also present an opportunity for businesses to use them as a tool for employee engagement, and we are increasingly seeing businesses establish them as the foundation on which to build a broader benefits package."

Expert Opinion
It is very welcome to see that small businesses have embraced auto-enrolment and seen many benefits from its introduction. However, one of the other key findings of this research is that many SMEs also reported the need for external support when it came to its implementation and the general management.

"This is another area where smaller firms should not think they have to go it alone and we would urge them to always seek advice to ensure they are complying with the necessary regulations on pensions matters."
Nigel Bolton, Partner