Updated 03 September 2020
Smaller businesses should think about paying more than the minimum contributions into auto-enrolment schemes. Why? Allan Maxwell explains.
Why should you be one of the small to medium sized employers (SMEs) who pay more than the auto-enrolment minimum contributions for at least some of their workers?
“Auto-enrolment can be seen by employers as a further administrative burden and pseudo taxation. But it shouldn’t be seen this way”
The Department for Work and Pensions has recently published research that says at least 30 per cent of SMEs will pay in more than the auto-enrolment minimum for some of their workers. Employers with between 50 and 250 workers are the most likely to pay that higher level of contribution.
But why would employers want to pay more?
Auto-enrolment can be seen by employers as a further administrative burden and pseudo taxation. But they shouldn’t see it this way. It’s actually a great opportunity for their business. Those SMEs who embrace the introduction of workplace pensions and auto-enrolment have the chance to generate a positive message for their employees and be a leading example. After all, a well-communicated introduction of a higher-quality pension scheme is likely to create a reciprocal response from employees.