01 October 2015
Back to news homeThree years ago today (1 October 2015) saw the introduction of automatic enrolment to the UK. With over 5 million workers enrolled to date and up to 5 million workers yet to be enrolled, today marks the halfway point for auto enrolment.
The three year anniversary also heralds a step change in the number of employers coming under the duties. Around 64,000 employers have met their duties in the last three years but there are a further 1.8 million to set-up a scheme between now and 2018. An average of 58 employers enrolling each day over the last 3 years rockets to an average 2,000 a day for the next stage of auto enrolment, growing by around 3,500 per cent.
Employers from the wholesale and retail sector are one of the biggest groups, with around 210,000 employers yet to set-up a scheme, as well as professional and technical services (216,000), construction (161,000) and administration and support (92,000).
As well as unprecedented numbers of employers setting up an auto enrolment scheme, they are unlikely to have experience of offering a pension. NEST research1 found that only 26 per cent of small and micro employers currently offer a pension scheme. However there are simple steps they can take to get ready. NEST has released top three tips to help employers (see below).
Despite high volumes and low levels of experience, NEST data on the first few months of the first wave of small businesses to complete auto enrolment shows that concerns for this cohort may be unfounded. Smaller employers tend to have simpler worker set-up and payment processes than their larger counterparts and as a result are likely to set up with just one group of workers, and one payment source2.
Helen Dean, CEO of NEST, commented:
‘It’s been three years since auto enrolment launched in the UK and today marks the halfway point but this is also where volumes really ramp up. Having only had 4 per cent of employers meet their duties so far, there are going to be around 35 times as many employers staging in the coming years. This is when the business world really gets to grips with auto enrolment.
‘The first three years have seen big employers, with complex pay periods and organisational structures, meet their auto enrolment duties. They were also the first to go through auto enrolment, without others to look to for experience. This time is different, the next stage sees the majority of employers meet their duties but they have smaller workforces, more straightforward organisational structures and they can lean on the learnings from employers who went before them. Although the next few years will see volumes ramp up, they’re walking a well-trodden path and there are some simple steps they can take to get ready.’