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<p>The Government is committed to helping people achieve financial security in later
life and is reforming the pension system as part of its efforts to encourage a culture
of saving. Automatic enrolment was introduced to enable most people in work to save
for later life. It has been a great success to date with over 6.8 million eligible
workers enrolled by more than 290,000 employers since it began in 2012 and it is important
we recognise the contribution employers have made to this achievement.</p><p> </p><p>Automatic
enrolment is currently being extended to small and micro employers. While the self-employed
are not eligible for automatic enrolment, they will have legal duties to enrol any
eligible workers in their employ. The Government understands that these employers
may find complying with automatic enrolment challenging and we are doing all we can
to make automatic enrolment as straightforward as possible for this group. The Department
and The Pensions Regulator (TPR) are focussed on making compliance with automatic
enrolment duties as clear as possible, as well as simplifying the language regarding
automatic enrolment.</p><p> </p><p>As part of this work, TPR has launched an interactive
“Step by Step” guide on their website. This simplified guide to meeting AE duties
is designed to meet the specific needs of employers who may not have pensions experience,
including those with just one or two staff. The guide includes a duties checker so
that employers can easily find out what they will need to do to comply and when. Using
the duties checker also means employers will receive tailored communications relevant
to their circumstances.</p><p> </p><p>What an employer pays and the amount of time
they spend on setting up automatic enrolment will depend on various factors, including
how they use business advisers, how they run their payroll and which pension scheme
they choose.</p><p> </p><p>From research it has conducted, TPR estimates that small
employers with between one and four staff members usually spend a total of about 10
hours overall carrying out all their automatic enrolment tasks, over a 12 month period
before their staging date. This research has also shown that average costs associated
with outsourced payroll are less than £200 while average pension scheme set up costs
are under £500.</p><p> </p><p>Automatic enrolment is a legal duty for employers, just
like paying the National Living Wage, tax and National Insurance. There are no plans
to reimburse employers for time or costs should their employees choose to opt-out.
However, less than one in ten people are choosing to opt-out which is much lower than
originally estimated. We have also seen around 5% of people not eligible for automatic
enrolment choosing to opt-in to their employer’s pension scheme.</p>
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