Auto-enrolment for SMEs - How to ride the wave

The wave of the Government’s new auto-enrolment laws is now hitting SMEs at full force, with the financial impact of contributing to pensions a significant blow for many small companies’ budgets. 

The new law, introduced in 2012, states that every employer must automatically enrol workers into a workplace pension scheme if they:

  • Earn more than £10,000 a year
  • Are aged between 22 and State Pension age
  • Work in the UK

The implementation of the law is being staggered across 6 years, with larger organisations the first to get their toes wet.  The staging date for organisations is based on payroll size as of 1 April 2012, and can be found on The Pension Regulator’s website.  

Generally speaking, the larger your company, the earlier your staging date.  The staging date is the deadline by which your company’s pension scheme needs to be in place and ready to enrol staff, and for many SMEs, this is now on the horizon. 


On top of administration costs, employers are required to contribute to every eligible employee’s pension.  The current legal minimum contribution for all workers is 2% of their qualifying earnings.  As an employer, it will be compulsory for you to contribute at least 1%.  It is planned that minimum contributions will increase gradually over the next few years, so it’s important to factor this in when planning budgets.  

Keeping your head above water

For many small companies, contributing to employees’ pension pots will be a new expense, creating an additional financial pressure.  One effective solution for replacing funds is for employers to maximise saving opportunities such as salary sacrifice schemes. 

Salary sacrifice schemes such as childcare vouchers, cycle-to-work, workplace training, mobile phones, workplace parking and holiday purchase all enable employers to make significant National Insurance savings, which can make a real difference to company finances.  The schemes provide a win-win solution, with benefits both for employees and employers.  For example, holiday purchase schemes are popular with employees as they enable them to purchase additional annual leave (saving up to 42% in tax and National Insurance on the cost), and employers as they can save 13.8% in National Insurance contributions on the amount each employee sacrifices.  The scheme can also help to reduce a company’s annual salary bill, and make that all-important work/life balance more achievable for your employees, increasing workplace morale.    

The good news is, salary sacrifice schemes also require very little employer administration if you choose to use a specialist employee benefits provider such as Wider Plan.  Alison Chalmers, director of Wider Plan says “We’re pleased to be able to help small companies make savings both prior to and following their auto-enrolment staging dates.  Providing salary sacrifice schemes can generate considerable savings for a company, and at a time where budgets may be being stretched further, offer a great helping hand.”

If you would like to find out more about how salary sacrifice benefits could help your  organisation, call Wider Plan on 0800 612 7440 or email [email protected].  

Comments (1)

  • @Hulbert_Defaqto
    Tue, 17 Mar 2015 12:38pm GMT
    Good article.
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    You can compare key requirements, such as who offers guaranteed acceptance and all schemes have been impartially Star Rated to aid decision makers.