The majority of small employers have been able to implement automatic enrolment by themselves and without cost, research by The Pensions Regulator has shown.
TPR asked small employers how much automatic enrolment cost them in terms of time and money.
Employers told us that over a 12 month period they spent around 10 hours in total understanding their workplace pension duties and completing all their tasks.
Most employers we asked told us they did not have payroll set up costs and for those who did decide to use a business adviser, the average spend was around £400.
TPR has now published an online guide www.tpr.gov.uk/employercosts to help employers avoid unnecessary costs. The guide also explains that while some pension providers do not have set up costs, others charge up to £500.
TPR is reminding employers of the importance of starting plans early and leaving plenty of time to shop around for advice and services that will best meet their needs.
Employers who leave things to the last minute risk paying unnecessary costs. They should also be clear what services their providers and advisers are offering and exactly what they are paying for.
TPR’s Executive director of automatic enrolment Charles Counsell said: “We know that small and micro employers are concerned about how much automatic enrolment will cost them in terms of both time and money and we know it is not without its challenges.
“Our online duties checker (www.tpr.gov.uk/employers) is designed for employers who do not have pensions experience and makes automatic enrolment as straightforward as possible.
“Many small employers with fewer than 5 staff have told us their set up costs were in fact very low and that they didn’t need advisers.
“To help employers avoid any unnecessary expense meeting their duties we’ve looked at the experience of the first group of employers with fewer than five staff.
“Based on their insight, we are providing an idea of how long other employers will need to spend planning for automatic enrolment and what they can expect to pay an adviser should they choose to use one.
Mr Counsell called on small employers to start their plans in good time: : “We would urge all employers to start early and take a bit of time to get an understanding of what you need to do – it will save time and money in the long run. Leaving plans to the last minute means employers are more likely to incur unnecessary costs.”