Small businesses in the region have been warned to allow extra time to set up their auto enrolment pensions, after the regulator revealed it had underestimated likely demand by almost 40%.
Truro-based pensions expert Watson French, the company behind the online advice platform My Auto Enrolment, sounded the warning after The Pensions Regulator released new figures last week raising the number of businesses expected to need a workplace pension from 1.3 million to 1.8 million.
Watson French MD, Stephen Watson, believes the increase will put the pensions sector under extreme pressure, and could cause problems for south west businesses in particular.
“Business owners need to know that getting their auto enrolment pension scheme sorted out could take much longer than they bargained for,” he said.
“Pension providers now have to set up half a million more schemes than they first thought. That will inevitably cause delays, so if employers don’t leave enough time that could land them in hot water with The Pensions Regulator.
“The worrying thing for us in the south west is it will be small companies who are affected most; we have a higher proportion of those than anywhere else in the country.”
As well as increasing the overall number of employers affected by the new pension rules, the new figures predict the peak demand will be later – and far higher – than first thought.
Watson added: “Instead of coping with 220,000 new schemes in a single quarter – already challenging enough – summer 2017 will see 350,000 companies start auto enrolment in a three-month period. Any business scheduled to stage their pension then would be well advised to get moving as soon as possible.”