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Wednesday 24 February 2016 10:52 am

Small business representatives tell the Work and Pensions Committee of their auto-enrolment worries, including clash between adopting system and National Living Wage

By: Hayley Kirton

Smaller employers need to act now to understand what is required of them under the pensions auto-enrolment rules, small business representatives have cautioned.

Speaking in front of the Work and Pensions Committee this morning, Mike Cherry, policy director at Federation of Small Businesses, pointed out that research by his organisation indicated that that many small businesses were still confused about what they needed to do, despite the deadline for enrolling eligible employees looming for many, to avoid the "Draconian" penalty regime.

Employers have been obligated to enrol their eligible employees into a pension scheme since October 2012, with staging dates depending on the number of employees they have. 

Cherry also pointed to difficulties some small businesses might have if their staging date clashed with the implementation date for National Living Wage, which will come into effect this April.

Meanwhile, Ian Cass, managing director of the Forum of Private Business, argued that small business owners' do-it-yourself attitude to their businesses could lead to such people spending an excessive amount of time trying to keep up with the rules. 

Speaking about encouraging self-employed and lower paid people to save into a pension pot, Yvonne Braun, director, Long Term Savings Policy, Association of British Insurers, said that having the ability to look at pension arrangements online at a glance through a "pensions dashboard" had proved very successful in other countries.