A growing number of companies are risking a fine by failing to set up their workplace pension on time according to new figures from Aviva.
Around 500,000 UK businesses are due to set up a pension scheme during 2017 under auto-enrolment legislation. The Pensions Regulator (TPR) provides every business with a staging date by which they should have a workplace pension scheme in place.
However, according to Aviva's own client data, the number of firms missing this deadline has increased from 1% in Q1 2016 to 14% in Q4.
It means that one in seven of the businesses applying to Aviva for a workplace pension made their application after their staging date had passed; and 38% left their application to the last minute (less than two months before their staging date).
Figures from The Pensions Regulator show that the number of employers failing to fulfil their auto-enrolment duties is rising. In Q3 2016, 3,728 fixed penalty notices for £400 each were issued, up from 861 in Q2, 2016.
Andy Beswick, managing director of business solutions at Aviva, said: "We're seeing more and more firms applying to Aviva for a workplace pension after their staging date has passed. It's something we need to keep a close watch on, but it is understandable. Auto-enrolment is now becoming a reality for very small companies which have many priorities and not necessarily the resources to deal with them all.
"The message to businesses for 2017 is clear. If you haven't been through auto-enrolment yet, this is likely to be your year. Don't stick your head in the sand. Embrace it, find a way to use it as an advantage to your business and get your employees enthused about saving for their future."
The Government is to review auto-enrolment this year. A recent report from the Pensions Policy Institute (PPI) revealed that 3.3 million of the people excluded from auto-enrolment had been excluded because they earn less than £10,000 a year.
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