Employers Must Accept Their Workplace Pension Responsibilities or Face the Cost – Literally01 February 2016
Employers Must Accept Their Workplace Pension Responsibilities or Face the Cost – Literally
The latest compliance and enforcement statistics published by The Pensions Regulator (TPR) show how the number of fines issued have soared over the last quarter coinciding with the first batch of small and micro employers reaching their staging dates. Over £400,000 in Fixed Penalty Notices were issued by the regulator in the last quarter (1 Oct – 31 Dec 2015) to employers for failure to meet their Auto Enrolment obligations*. That is an increase of 178% over the amount issued in the preceding 3 years, emphasising that the TPR will not accept ignorance as an excuse for not putting in place a qualifying pension scheme within the required timescale. David Smith, Director of Financial Planning at Tilney Bestinvest, comments on the report.
“There is undoubtedly a direct correlation between the boom in fines and the influx of small and micro employers beginning (or not beginning, as the case may be) their Auto Enrolment journey. And, whilst many cynics view this as further evidence of the Government suffocating the smallest employers, it is at the very least a statement of intent by the Regulator that non compliance will not be tolerated, regardless of size or stature of the employer in question.
“Quite rightly, there is sympathy for smaller employers as they tend not to have the resource of their larger peers to deal with such complex legislation and time consuming activities. Many do not have the financial clout to meet the costs of the pension contributions in question, never mind paying for professional assistance, but now they face a real threat of significant penalties. And, despite the Regulator’s claims at raising awareness, there is a significant lack of knowledge out there amongst the smallest employers. Whilst some legitimately believe they have no requirements to do anything, there are many employers that believe they simply won’t be caught and at the very least, won’t be fined. The recent data published clearly shows the contrary and epitomises the Regulator’s zero tolerance stance.
“The Department for Work and Pensions released a consultation paper on 26 January, seeking views on potentially simplifying legislation for smaller employers but for many, this will be after the proverbial horse has bolted; by the time it comes into force (if at all) it will do little to help those who have recently or are imminently due to hit their staging dates. And whilst the smallest employers may feel aggrieved at the effect of Auto Enrolment on their bottom line, just dismissing their duties will only serve to compound their problem. Ultimately, we can all cry hard done by, but the fact remains; employers must comply or face the penalty.
“What is for certain is that this is only the beginning. By the end of December 2015, less than 100,000 employers had reached their staging date. In 2016 alone, another half million small and micro employers / businesses will need to comply with their duties. If the murmurs amongst the smallest enterprises ring true, the Pensions Regulator is in for a bumper year in fines.”
The value of investments, and the income derived from them, can go down as well as up and you can get back less than you originally invested.
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About Tilney Bestinvest
Tilney Bestinvest is a leading investment and financial planning firm that builds on a heritage of more than 150 years. We look after more than £9 billion of assets on our clients’ behalf and pride ourselves on offering the very highest levels of professional client service with transparent, competitive pricing across our entire range of solutions.
We offer a range of services for clients whether they would like to have their investments managed by us, require the support of a highly qualified adviser, prefer to make their own investment decisions or want to take more than one approach. We also have a nationwide team of expert financial planners to help clients with all aspects of financial planning, including retirement planning.
We have won numerous awards including UK Wealth Manager of the Year, Low-cost SIPP Provider of the Year and Self-select ISA Provider of the Year 2013, as voted by readers of the Financial Times and Investors Chronicle. We are pleased that our greatest source of new business is personal referrals from existing clients.
Headquartered in Mayfair, London, Tilney Bestinvest employs almost 400 staff across our network of offices, giving us full UK coverage, and we combine our award-winning research and expertise to provide a personalised service to clients whatever their investment needs.
The Tilney Bestinvest Group of Companies comprises the firms Bestinvest (Brokers) Ltd (Reg. No. 2830297), Tilney Investment Management (Reg. No. 02010520), Bestinvest (Consultants) Ltd (Reg. No. 1550116) and HW Financial Services Ltd (Reg. No. 02030706) all of which are authorised and regulated by the Financial Conduct Authority. Registered office: 6 Chesterfield Gardens, Mayfair, W1J 5BQ.
For further information, please visit: www.tilneybestinvest.co.uk
Tilney is a leading investment and financial planning group that builds on a heritage of more than 180 years. Our clients are private investors, charities and professional intermediaries who trust us with over £23 billion of their assets. We offer a range of services including financial planning, investment management and advice and, through our Bestinvest service, a leading online platform for those who prefer to manage their own investments.
We have won numerous awards. Tilney has been awarded Best Conventional Advisory Service at the 2018 City of London Wealth Management Awards, Best Advisory Service in the 2015 City of London Wealth Management Awards; Investment Award – Cautious category in the Private Asset Management Awards; and Stockbroker of the Year, Execution-only Stockbroker of the Year and Self-select ISA Provider of the Year 2015, as voted by readers of the Financial Times and Investors Chronicle. Bestinvest was voted Best SIPP Provider and Best Fund Platform at the 2017 City of London Wealth Management Awards, Best Direct SIPP Provider at the YourMoney.com Awards 2017, Best Stocks & Shares ISA Provider at the 2017 Shares Awards, as well as Best Self Select ISA Provider, Best Online/Execution-only Stockbroker and Best Investment Platform 2017 at the FT and Investors Chronicle Investment and Wealth Management Awards, as voted by readers of the FT and Investors Chronicle.
Headquartered in Mayfair, London, the Tilney Group employs over 1,000 staff across our network of 30 offices, enabling us to support clients with a local service throughout the UK.