Auto Enrolment Delay

The DWP have confirmed a delay to the Auto Enrolment staging date for 'small employers'.

All businesses with more than 3000 employees will keep their original staging dates, with auto enrolment set to start from 1st October 2012.

Businesses with between 50 and 2999 will have their staging dates moved to smooth out the transition.

Businesses with less than 50 employees will not have to auto enrol until after May 2015.

The delay will mean that the increase in contributions (Phase 2) will not take place in October 2016 as originally planned, but from a later date.

Full details of the new staging dates and contribution dates are expected to be available in January 2012.

The DWP statement in full is as follows:

Government announces changes for small businesses to the automatic enrolment timetable

The Government today confirmed that automatic enrolment will begin on time in autumn 2012 and all employers will remain in scope.

Small Businesses will be given additional time to prepare for the implementation of automatic enrolment. The timetable will be adjusted so that no small employers are affected by the reforms before the end of Parliament.

The rate of pension contributions will remain unchanged until all businesses have started automatic enrolment. This measure will benefit all employers.

Minister for Pensions, Steve Webb, said 'Our society and economy needs to be based on a foundation of saving, not debt. Automatic enrolment will help millions save, and to not act will leave people poorer in retirement. That is why I am confirming today that automatic enrolment will start on time and all employers will be part of it.

We recognise that small businesses are operating in tough economic times so we are softening the timetable for implementation to give them some additional breathing space. This is a sensible step that ensures long term pension issues are addressed while meeting the short and medium term needs of small businesses.

We are committed to ensuring the employees of these small businesses get the chance to save and that is why no one will miss out'.

Under the revised timeline, small businesses would begin automatically enrolling their staff in May 2015, instead of the current timing of April 2014. Half of all workers will still be automatically enrolled before the end of this Parliament.

NOTE:

Small businesses include any business with less than 50 employees.

Further details will be published in January 2012.