Auto-Enrolment Update

Both Now: Pensions and People’s Pension, the two mail alternatives to NEST for small employers have announced that they will be making a charge for their services going forwards

Now: Pensions have introduced an employer charge of up to £40 a month for those employers who register with them on or after 1 October 2015 and who have staging dates from 2016 onwards. Employers using The People’s Pension for auto-enrolment will face a one-off charge of £500 plus VAT or if they apply via a financial adviser a reduced charge of £300 plus VAT. The changes will affect customers who sign up from 23 November and have staging dates in January 2016 and beyond. Employers with a staging date in 2015 but who sign up from 1 January 2016 will also be charged.

In reality this means is that for small employers who do not want to pay for a pension scheme in addition to meeting the costs of pension contributions for their employees, NEST will become the default choice.