Press Release
Majority of UK SMEs not compliant with stakeholder pensions law
Despite companies with more than five employees being legally obliged to
provide staff with a stakeholder pension, almost two thirds (64%) of small
to medium-sized businesses in the UK are failing to comply, according to
new research from specialist cash flow provider Bibby Financial Services.*
Employers, who do not fall within the 18% of UK small and medium-sized
businesses offering stakeholder pensions, are exempt from doing so if they
provide their employees with access to an occupational or personal pension
scheme. However, only 3% of owners and managers surveyed said they provide
employees with access to a personal pension scheme, while just 15% have an
occupational scheme in place.
Of those owners and managers that do provide employees with contributions
to their pension fund, 17% favour contributing to an employee’s private
pension plan rather than setting up a group personal pension scheme on
behalf of their employees.
However, when it comes to planning for their own retirement, 68% of owners
and managers make regular payments into a private pension scheme and seven
out of 10 (70%) also invest in property to fund their retirement plans.
“For busy owners and managers with many roles to juggle as their businesses
flourish and grow, the problem with the setting up of a pension scheme
often lies with the administration and cost involved, rather than a lack of
goodwill towards the well-being of employees and their future provision,”
said Bibby Financial Services’ chief executive David Robertson.
The lack of pension provision in the UK’s small business community
highlights the pressures faced by busy managers and owners who are trying
to get their businesses off the ground while keeping up to date with the
latest regulations and finding the time to adhere to them.
“When it comes to pensions, the paperwork that has to be completed in order
to comply with regulations to set up a scheme for a small business is
beyond belief. The cost of completing this time and admin-intensive process
further hinders a small business from setting up a pension scheme for its
employees,” Robertson added.
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