New figures from Aviva have revealed that a growing number of companies are risking a fine by failing to set up their workplace pension in time. Around 500,000 UK businesses are due to set up a pension scheme during 2017 under auto-enrolment legislation.
During Q4, 2016:
- 1 in 7 (14%) of businesses applying to Aviva for a workplace pension made their application after their staging date had passed
- More than a third of businesses (38%) left their application to the last minute*
- Just under half of companies (48%) prepared for auto-enrolment well in advance**
However, Aviva’s own client data, from its second auto-enrolment application tracker, shows that during Q4 of 2016, 1 in 7 companies that applied to set up their pension with Aviva had missed their staging date – the date by which they should have had a workplace pension scheme in place, which is set by The Pension Regulator (TPR).
In a worrying trend, the proportion of firms applying with Aviva that missed their staging date has increased rapidly during the course of 2016, from just 1% in Q1 to 14% in Q4. However, during this time the volume of companies setting up workplace pensions has also increased offering some explanation for the rapid growth of ‘late stagers’.
Figures from The Pensions Regulator show that the number of employers failing to fulfil their auto-enrolment duties is rising. In Q3 2016, 3,728 fixed penalty notices for £400 each were issued***. This is up from just 861 in Q2, 2016****.
Andy Beswick, Managing Director of Business Solutions at Aviva, said:
“We’re seeing more and more firms applying to Aviva for a workplace pension after their staging date has passed. It’s something we need to keep a close watch on, but, it is understandable. Auto-enrolment is now becoming a reality for very small companies which have many priorities and not necessarily the resources to deal with them all.
“We understand this and we’re doing all we can to help these companies. We can help those companies that have missed their deadline and we’ve set up a simple online process to get a workplace pension in place.
“The last thing anybody wants is to see small business owners getting fined because they haven’t got their workplace pension set up in time.”
2016 in numbers
The table below details the proportion of workplace pension applicants to Aviva who applied in Q1, Q2, Q3 and Q4 2016 in comparison to their staging month.
While the number of companies missing their staging date has been increasing, the number of firms preparing for auto-enrolment two months or more in advance is staying relatively stable (47% - 57%).
| Application made after staging month had passed | Application made in the month of staging date | Application made in the month prior to staging date | Application made 2 months prior to staging date | Application made more than 2 months prior to staging date | |
| Q1 2016 | 1% | 17% | 35% | 12% | 35% |
| Q2 2016 | 10% | 12% | 21% | 17% | 40% |
| Q3 2016 | 12% | 13% | 23% | 14% | 39% |
| Q4 2016 | 14% | 14% | 24% | 14% | 34% |
“It is good to see that around half of all companies we are dealing with are preparing for auto-enrolment well in advance,” said Andy Beswick. “The decision of which provider to use for a workplace pension shouldn’t be rushed so dealing with it well in advance of the staging date can be an advantage.
“The message to businesses for 2017 is clear. If you haven’t been through auto-enrolment yet, this is likely to be your year. Don’t stick your head in the sand. Embrace it, find a way to use it as an advantage to your business and get your employees enthused about saving for their future.”
*Takes into account businesses who made their application with Aviva during Q4 2016 in the month of their staging date (14%) or the month prior to their staging date (24%)
** Takes into account those who made an application with Aviva during Q4 2016 two months (14%) or more (34%) before their staging date
*** http://www.thepensionsregulator.gov.uk/docs/automatic-enrolment-use-of-powers-sept-2016.pdf
**** http://www.thepensionsregulator.gov.uk/docs/automatic-enrolment-use-of-powers-june-2016.pdf
- Ends -
If you are a journalist and would like further information, please contact:
Ben Moss in the Aviva Press Office
Landline: 0117 928 5843
Mobile: 07827 832 395
Email: ben.moss@aviva.com
Notes to editors:
• Aviva provides life insurance, general insurance, health insurance and asset management to 33 million customers, across 16 markets worldwide
• In the UK we are the leading insurer serving one in every four households and have strong businesses in selected markets in Europe, Asia and Canada. Our shares are listed on the London Stock Exchange and we are a member of the FTSE100 index.
• Aviva’s asset management business, Aviva Investors, provides asset management services to both Aviva and external clients, and currently manages over £319 billion in assets.
• Aviva helps people save for the future and manage the risks of everyday life; we paid out £30.7 billion in benefits and claims in 2015.
• By serving our customers well, we are building a business which is strong and sustainable, which our people are proud to work for, and which makes a positive contribution to society.
• The Aviva media centre at http://www.aviva.com/media/ includes company information, images, and a news release archive.
• For an introduction to what we do and how we do it, please click here http://www.aviva.com/about-us/
• For broadcast-standard video, please visit http://www.aviva.com/media/b-roll-library/
• Follow us on twitter: www.twitter.com/avivaplc/
• Follow us on LinkedIn: www.linkedin.com/company/aviva-plc
• For the latest corporate films from around our business, subscribe to our YouTube channel: www.youtube.com/user/aviva
• Aviva has a Globelynx system for broadcast interviews. Please contact the Press Officer noted above if you would like to make a booking.