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Accountants rising to the auto enrolment challenge

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7th Mar 2016
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As an accountant you may have had clients knocking on your door asking for help with auto enrolment, says Paul Budgen, head of business development at NEST.

Hundreds of thousands of small employers are now auto enrolling their workers into a pension scheme and we know that many will want help, a majority in fact.

According to our research, accountants in particular will be in demand. So many of you might be wondering what the experience of small employers has been so far. A group of small and micro employers came under AE duties in June 2015 and signed up to NEST. We’ve kept up-to-date with them to see how they’ve managed. The results were quite surprising.

Small employers are not necessarily pension experts. Plus big HR departments and payroll teams aren’t the norm in organisations of this size. You can understand why there have been predictions that these smaller employers would find AE too difficult.

On the contrary, we’ve found that they’re handling the process pretty well. Their small size and simpler processes mean they’re likely to be paying contributions at the same rate and frequency for all their workers and from a single bank account.

Smaller employers are also less likely to use their waiting period than their larger counterparts. Just 29% of small and 26% of micros are enrolling their workers in the three month period after their staging month, compared to 44% of larger employers.

So they seem to be finding AE more straightforward than anticipated. We’ve even been seeing that they’re using NEST in a simpler way than larger employers. A recent survey of small employers using us found a large majority (72%) say they expect to rarely or never call NEST in the future.

Given we’ve always had to be ready for the high volumes of employers coming through from this year onwards, we’ve worked consistently to streamline our online systems, so it takes just a few simple steps to set up. So it’s good to see this work paying off, particularly as it also means accountants working on their clients’ behalf should also find it straightforward.

You might be asking what these findings mean for accountants? Does this suggest small employers won’t need help? That’s not what we’re seeing. We’ve had 6,600 accountants and other intermediaries sign up to NEST Connect, which means they can manage AE for their clients.

Many small employers may simply just want to get on with the day-to-day running of their business. After all, it’s likely that’s why they went into business in the first place. With almost two thirds of small employers looking for a pension provider that offers the flexibility to outsource AE, we still expect many tens of thousands could be looking for AE help just this year.

At NEST we think it’s really important to understand employers, learn from their experiences and feedback. With intermediary groups like accountants playing a big role in helping employers stage, we also think it’s important to share these findings. Collaboration is key for the ongoing success of AE. So we’ll keep observing and learning as the year progresses, and keep you all updated.

 

Paul Budgen is head of business development at NEST.

AccountingWEB has launched the No-one gets left behind campaign to alert as many accountants as possible to the obligations implied by auto enrolment. Read our simple eight-point statement which sets out the auto enrolment facts you need to know.

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