Employers and staff should prepare for a ‘pensions crunch’ when medium-sized firms begin enrolling for workplace pensions in 2014, experts say.
Large firms have already seen staff automatically enrolled in the government scheme to make sure people to save for their retirement.
The first half of 2014 is earmarked to roll out the scheme to an estimated 30,000 medium-sized firms which firms are being urged to ensure that they are ready for the upheaval to their payroll systems.
Smaller firms will see staff enrolled by 2018. Staff can opt out of automatic enrollment but so far opt-out rates are low in large firms.
Laith Khalaf, head of corporate research at investment company Hargreaves Lansdown, said: “With close to 30,000 employers due to auto-enrol in the first half of 2014 there are serious questions about how the industry will cope with this influx of demand.
“An automatic enrolment strategy typically takes six months to formulate and implement. Auto-enrolment is going to cost many companies serious amounts of money.”
He said it was vital that a communications strategy was put in place so staff knew exactly what was going on, otherwise the potential benefits would be lost.
- Read more on automatic pension enrolment on the bbc website
- Workplace pensions – read about employers’ obligations on the UK government website
- Find out if you will be automatically enrolled on the UK government website