Auto enrolment: Communication breakdown

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Robert Lovell
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The pensions industry is struggling to find the right way to engage with accountants and bookkeepers around auto enrolment ahead of a small business capacity crunch.

AccountingWEB wanted to find out how well our members thought they have been informed about what many in the pensions industry are calling a coming “tsunami”.

More to follow… 

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28th Mar 2014 10:27

Help us inform the powers that be

Given the concerns raised above we're becoming increasingly concerned that accountants are not being informed about the coming changes.

We hope to understand more about how you all feel you understand those changes and have launched a survey to gather that data.

Should the results of this survey suggest that there is a need for more support we will lobby for that to happen.

So please help by taking part, whether you feel that you know all there is to know or this is the first time you've heard of auto enrolment your input is extremely valuable.

We're not alone in this and we are grateful to Friendly Pensions for supporting us. They've been raising the issue at the highest levels for some time now and will continue to do so in support of SME and their advisers.

Take the survey now

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By kelvin
28th Mar 2014 12:23

Workplace Pensions - auto enrolment

We have around 60 payroll clients and with the March 2014 payslips we sent a paper advising each as to when their staging date would be and information relating to the legal requirements, etc.

It was also stated that, in all probability, they would require to be enlisted via NEST, as no Pension Provider we have approached on behalf of our clients were interested in taking on schemes with less than 12 employees.

Even those schemes with in excess of 12 employees would not be taken on as the salary levels were too low for the insurance companies to make money from.

The conclusion from this is that in 2016/17 there will be around 1m small schemes all requiring to be registered with NEST - and one can envisage them attempting to deal with that number.

As always, those introducing this type of legislation have never been out there in the "real world", and thus are not in a position to see the inevitable consequences of their legislation.

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By rico
28th Mar 2014 13:58

work place pension

hello i think it unwise unless your an IFA to suggest any pension provider. it may help clients to point out that different providers are offering various levels of support around the administration of AE. and clients need to take that on board when selecting a provider as nearly 90% of the burden of AE is centred around the admin not the pension choice. i think it is safe to discuss these issues with clients. Nest offers little support and what it offers is currently inadequate in my view and leaves small employers with lots to do. 

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28th Mar 2014 13:30

There are (probably) alternatives


There are several potential alternatives to NEST if you need them (NOW Pensions , People's Pension and Friendly Pensions amongst them) who will deal with any size of scheme. They all provide a level of support in the preparation for staging but which one would be most appropriate for your clients will require some research.


If anyone has any experience of clients staging (or preparing to do so) please share here or PM me as your story may provide valuable learning for the rest of the community.



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By kssco
28th Mar 2014 14:29

Not applicable

I'd like to see one of the articles on this subject covering the situation of about 1 million small companies where there is one director drawing a salary of £8,000 a year or less and taking profits as dividends.  As I understand it, they are not relevant employees, or whatever the expression is, so they don't have to be auto-enrolled.  However, they have the right to opt in and what nobody has yet told me is whether the company has to set up an empty pension scheme that the director could opt into, however unlikely this is.

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28th Mar 2014 14:55


It is actually quite logical of the small accountant to "put their head in the sand"

Or as I would call it "wait and see what happens"

There is little point engaging with small clients with 2 or 3 employees about what might happen in 18-24 months time.  Not all of them will even still be trading. 

As with most legislation time scales and deadlines slip away once its close by, there is little point in being ahead of this game, not least as there is no penalty for non-compliance until you have had a warning, and with presumably several hundred thousand payrolls not complying right away there is plenty of time to "wait and see".

This is not complacent, its a legitimate strategy for coping with "red tape" and the inevitable concessions and changes that will occur once micro firms are actually properly considered.

My clients wont be impressed if we have spent hours complying with rules that are relaxed for small companies with 5 or less employees. For example removing the requirement to set up a scheme if everyone (which could be a single employee) opts out would at a stroke change this from a big headache to a simple case of 'encouraging' staff to opt out.



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28th Mar 2014 20:10

I am confused, as normal
The pension industry is struggling to find the right way to engage accountants?

Why, engage clients directly!

The pension industry may now start to understand what a very difficult job us accountants have getting small business to do anything right. It is clear, when I speak with clients that they really are not interested with auto enrolment and will do it only when they have to. We hear about pension providers will be selective in the employers they take one, but I don't feel that anyone has put anything to the table to entice small businesses signing up early. Afterall this is a regime that is forced upon a small business community that quite often has margins squeezed by the larger businesses or are dealing with domestic markets whose margins are low.

As for engaging with the accountancy cummunity, I am not convinced that is the problem here, as many accountants have employees themselves and understand it from this prospective.

What I am confused about is who will pay the accountant to constantly communicate with the client. It's not going to be the client and not going to be the pension provider (unless you like the kick back commission) so I am guessing the pension industry wants to engage accountants to undertake this unpaid task that they are struggling to deal with themselves.

I may sound harsh, but a small businesses has several things to deal with every week and they themselves are putting this behind:

Constant changes to the tax system
Health and safety
Debt collection
Employment law changes
Trying to find work for the employees to undertake
Etc. Etc. Etc

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By Old Greying Accountant
29th Mar 2014 22:12

The whole AE scheme ...

... is a typical government balls up and has been handled arse[***] about tit[***].

As I keep saying, the simple low cost method would be for RTI to notify employers which employees need to have pension deductions taken from them (based on the data they have on average wages levels).

The amount collected should be paid over with PAYE and invested in a Government run/backed basic "NEST" type scheme. It is then up to the employee to either:

Do nothing;Nominate an alternate pension provider (similar to the system with opting out);Notify the government they do not wish to be Auto-enrolled, which is thn notified back to the emplyer via RTI.

This would be simple and effective and not swamp small firms in unwanted red-tape. The above could apply to employers with less than 50 employees, or all employers as deemed most suitable.

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30th Mar 2014 09:40

I think this is being complicated by fear ... I have looked at 'NEST' and seems very straightforward.

I use Moneysoft and it will notify of which employees are relevant and what the amounts are and how much to pay over similar to the PAYE system.

My concerns are can small business really afford it and the simple answer is no!

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31st Mar 2014 10:11

Here's a cunning plan

As Kelvin has done, why not advise the clients of their staging date, and their responsibilities, but then ask them what, if anything they want us to do?  "If you would like any assistance with this, please let me know". 

The fact that it appears there are not enough IFAs (LOL sorry!) or capacity in the pension industry isn't our problem.  As a previous poster mentioned the pensions industry would be better served trying to engage with small employers and/or IFAs.  I can guess the response from the former in most cases who are worrying as to how they can survive the next six months.

Experience has taught me to exercise a 'wait and see maxim'.  It is not "burying ones head in the sand", it is more "hiding behind the sofa (pun intended!) and peeping out from time to time to see how things are progressing".  I cannot count how many of these government schemes have been fundamentally changed/cancelled/delayed before they actually come into effect. Oh, and isn't there an election next May?

Whether the Pensions Industry is a Cassandra or a Chicken Licken only time will tell!  I know where my money lies.



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31st Mar 2014 11:25


Judging from the problems would it not be better for small businesses of 1/2 employees just to downsize & make them redundant.Saves all the hassle to comply with more paperwork & legislation.

It may screw up Government Unemployment figures but should they care as every time they turn round the Inland Revenue Hit them with Penalties.

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31st Mar 2014 14:20


@mikey, the problem with "NEST" is not transactions, that is very basic adding up, its the set up advice that is the problem.

How can we advise clients on what pension scheme to offer? We cant just say "use NEST" if it turns out to be poor value (which is looks like) and we then hold the liability for future claims of the employees who have got shafted. 

How can we advise employees on whether they should opt out or not?

If accountants try and do this they are crossing the line marked "regulated advice".



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07th Apr 2014 14:09

AE and cross industry collaboration

As an IFA (don't stop reading, please), there are a lot of interesting comments here. We're already talking to a number of accounting firms and helping them retain control of their clients, of course we take the compliance risk if we advise on a pension scheme. The feedback we're getting is worth sharing. Quite a few of our new accounting friends are telling us they now see AE as their 'business within a business' and a wonderful opportunity to prove their (added) worth to the clients. This will help them retain clients and some are even seeing this as new stream of potential business as they can see very few 'solutions' coming out of the payroll/accounting world, as you might have expected. So, beware those who don't think 'AE is our problem'. This is proving to be a little misguided, at the end of the day the client should be at the forefront of our thinking, whether we understand the problem or not. 

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