Who’s afraid of auto-enrolment?

Despite the dire warnings – not that many UK employers

New research from workplace pensions provider NOW: Pensions reveals that UK small firms are relatively relaxed about auto enrolment and the introduction of the National Living Wage with concerns focussed on sales and access to finance.

Here’s the response to their question… 

“What’s your biggest business concern this year?”

  1. Sales                                                                          (34%)
  2. Access to finance                                                   (12%)
  3. EU referendum                                                       (7%)
  4. Government spending cuts                                (7%)
  5. Technology (not being able to keep up)          (6%)
  6. IT security                                                                  (4%)
  7. Auto enrolment                                                        (3%)
  8. National Living Wage                                             (2%)
  9. Attracting and retaining staff                              (2%)
  10. Lack of skilled workers                                            2%)


I know we are supposed to throw our hands in the air and cry “woe” upon these feckless employers ,NOW’s press release  laments that over a third of employers that completed their NOW application in Q1 were either very close to their staging date or after the deadline had passed. 

But I am not in the least worried about this. I am very happy that only 3% of employers are citing AE as a business concern. Presumably 97% are (to some degree) looking forward to offering their staff a workplace pension and an increasing contribution towards their retirement.

Winners mean losers

Not only is stage one of auto-enrolment fulfilled, but stage two, the dispersion of the policy to 1.7m smaller employers is not presenting SMEs and micros with the predicted thread. You may argue (as providers do) that there is complacency and ignorance baked into that “3%” number, but I give SMEs and micros (and their business advisers) more credit than that.

I speak as one of them. We tend to deal with problems sequentially and don’t strategise. If a problem is three months away , it’s a future problem. Today’s problem is sales and sales are impacted by lack of investment finance and the Brexit vote and then there’s a whole lot of other stuff that I know I’ve got to get round to but will probably pay someone else to do for me (cyber-security, auto-enrolment , social media).

Bottom line, auto-enrolment isn’t the big threat we were told it would be. And that means auto-enrolment is winning. Where there are winners, there are losers. The losers are the various ambulance-chasing middleware merchants who predicted carnage at this stage and now see their business plans in tatters.

We do not have carnage at payroll and we don’t have mass non-compliance at the Pensions Regulator and no organisation has or will go to the wall over auto-enrolment. Even the most egregious offenders – step forward Swindon Town FC – have shrugged off their fines and – despite public embarrassment – carried on trading.

The losers are the gain-sayers who said it wouldn’t work.

The new paradigm for auto-enrolment is pensions

kevin hart

Kevin Hart

I think something happened recently. I first spotted it when Kevin Hart of Sage intervened in a BASDA debate and asked us to think of auto-enrolment as a way that Business Software developers could get involved in helping in the public promotion of pensions.

The point Kevin made was that – to the public – auto-enrolment is not about payroll, or straight through processing – or regulatory processes. It is about getting people money in retirement through regular saving from the pay-packet.

That’s why auto-enrolment isn’t a threat but an opportunity. And it isn’t just an opportunity for the backroom boys of BASDA, but a chance for employers to show off that they are part of the solution and not accentuating the problem.

Of course there are still problems with the pensions into which we are investing. But if there’s a new paradigm for auto-enrolment, there’s a Zeitgeist for pensions! The pensions Zeitgeist is the demand from without and within the pensions world for value for money from the pensions we are peddling to these new employers and to those who here-to-now have got what they’ve been given.

Payroll  will eat pensions

By the end of the decade, the question applicants will ask won’t be “do you have a pension?”, but “how good is your pension?”.

Pensions will be part of business as usual whether you work in a chippie or make silicon chips.

Because pensions will be within (almost) every employer, every employee will have to think about them, if only when getting another job or at re-enrolment. They won’t go away.

Those people in companies who know about pensions will become increasingly valuable. I look forward to the day when the pensions officer in a company is a job that’s really worth having. That person can and should be the equivalent of the health and safety function, a really critical part of an organisation’s DNA

It may be the smallest employers will not have such people – but they will know someone who staff can ask questions of, someone who is trusted and reliable and has a track record. In my view, the one person within or without an organisation who fulfils that function is the person who pays us.

So when I say payroll will eat pensions, I mean that we will – I hope – start thinking of the people who pay us now, as the people who hold the keys to our being paid when we hang up our boots.

Who’s afraid of auto-enrolment?

97% of employers do not see auto-enrolment as their biggest threat. Those 3% who see it as a threat are to be congratulated but the 97% are not a threat – but an opportunity for pensions folk.

I know that enforcement is important and that the stick needs to be waved to the reluctant horse, but isn’t it really time we joined Kevin Hart and Sage and started talking pension auto-enrolment up as something that is going to do people a whole lot of good?

Thanks to NOW Pensions, your survey is good news to me and I hope it is good news to those of us engaged in making this great national enterprise work.


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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2 Responses to Who’s afraid of auto-enrolment?

  1. Andrew Kemp says:

    I suspect that by the end of the decade, younger applicants will still not be asking anything to do with pensions or LISAs.

  2. henry tapper says:

    the opt out rate for the under 30s is trending to zero

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