More than three quarters of IFAs plan to provide an auto-enrolment service to micro-employers and half intend to act on behalf of their clients, according to new research from the Pensions Regulator.
Data published today shows that 78 per cent of IFAs plan to offer some form of AE service, compared to 96 per cent or more across the accountancy, bookkeeping and payroll administration professions.
The research shows 53 per cent of IFAs plan to act on behalf of their clients, as opposed to taking more passive roles of providing information or technical advice, compared to 71 per cent of payroll administrators, 44 per cent of accountants and 42 per cent of bookkeepers.
The figures come as the Pensions Regulator has issued a warning to hundreds of thousands of small and micro employers to check when they must meet new workplace pension duties after it found almost two thirds still do not know the exact date they need to start complying with automatic enrolment laws.
The research, published twice a year, tracks awareness of automatic enrolment amongst employers and intermediaries, and how they are preparing to act.
The regulator estimates that, over the next two years, around 1.8 million small and micro employers will need to act as a result of automatic enrolment duties. Every employer is given a date set in law when their duties start – this is their staging date.
The latest employer survey highlights how the majority of employers due to stage between now and November 2015 have started preparing and are aware of their staging date, but that awareness amongst those due to stage in 2016 and beyond drops significantly. It also shows that most will seek the help of business advisers.
TPR executive director of automatic enrolment Charles Counsell says: “It is encouraging that, according to our latest research, most small and micro employers due to stage this year are well underway with their preparations, but there is no room for complacency.
“The challenge of ensuring 1.8 million employers meet their duties by April 2017 is significant and the research shows many employers are still not preparing early enough. We continue to develop new tools on our website to simplify the process for employers and we are using a diverse range of communications to reach out to employers, but my message to employers remains clear: start getting your plans in place or you risk a financial penalty.
“It is also positive that more advisers have stepped up to meet the needs of employers by developing new services, and by directing clients to the regulator’s website. I urge all intermediaries to ensure they can fulfil this vital role as more employers seek assistance.”
Key findings from the employer survey
- Nine in 10 employers staging between August and November 2015 had commenced preparation for automatic enrolment.
- Seven in 10 small employers expected to rely on an adviser to provide practical assistance with automatic enrolment.
- Most (79%) employers staging in 2015 knew their staging date. A lower proportion (29%) of employers staging between January – November 2016 accurately knew their staging date, similar to the 30% of January – April 2017 stagers who knew their staging date.
- Awareness of automatic enrolment increased among micro employers, while understanding levels increased significantly amongst both small and micro employers.
The People’s Pension director of policy and market engagement Darren Philp says: “We are just around the corner from auto-enrolment moving onto a whole new level.
“With hundreds of thousands of SMEs due to stage from January 2016, we need to continue getting the message out so employers can be well prepared to meet their new duties.
“The Regulator’s research on the importance of intermediaries in delivering auto-enrolment chimes with our own. Whether through accountants, advisers, or payroll, SMEs will be seeking help and support. It is crucial that intermediaries and providers alike gear up to support this market.”
Barnett Waddingham auto-enrolment specialist Adam Bexson says: “What is notable about today’s announcement is that despite offering detailed guidance for employers on their website, the Regulator has warned employers that advisers are in a better position to help employers meet their duties.
“Small employers need to bear in mind that there will be a rush for advice and the biggest issue they will face will be finding an adviser who has put in place processes which can cope with this capacity. Unfortunately advisers may well not have the capacity for the sheer volume of employers who need to auto-enrol their staff by their staging date.”