Occupational Pensions: Small Businesses

Department for Work and Pensions written question – answered on 8th September 2020.

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Photo of Theresa Villiers Theresa Villiers Conservative, Chipping Barnet

To ask the Secretary of State for Work and Pensions, what recent assessment she has made of the financial effect on small businesses of workplace pensions.

Photo of Guy Opperman Guy Opperman The Parliamentary Under-Secretary of State for Work and Pensions

Automatic enrolment is a success story that has seen over 10 million employees automatically enrolled into a workplace pension. Many of those workers benefitting were once poorly served or excluded from workplace pension saving, with many more women, lower earners and younger people building an asset for their future.

The Department’s evaluation of automatic enrolment and ongoing monitoring of the impacts of workplace pensions means that the we regularly check how the meeting of their automatic enrolment duties affects small businesses financially. Evidence from the 2019 Automatic Enrolment Evaluation report1 and a separate research study with new employers2 indicates that whilst some small and micro employers have experienced increased costs as a result of automatic enrolment, they tended to perceive the costs involved in monthly administration of pension contributions to be relatively low and the contributions themselves as manageable in the context of the overall running costs of their business.

Our immediate focus during the covid-19 national lock-down was to support employers and savers through the Coronavirus Job Retention Scheme, which included the payment of employer workplace pension contributions up until the end of July. At the same time, the Pensions Regulator took a proportionate approach on automatic enrolment compliance to minimise unnecessary burdens on hard-pressed employers, giving them more time and flexibility to meet their duties.

By early August, our unprecedented package of emergency support to employers was helping 1.2 million businesses and furloughing 9.6 million jobs. Our aim remains to support, create and protect jobs - giving businesses confidence to retain and hire new workers builds capacity for retirement saving.

In the Chipping Barnet constituency, since 2012, approximately 10,000 eligible jobholders have been automatically enrolled and 3,030 employers have supported their employees3.

1 Automatic Enrolment evaluation report 2019, DWP, February 2020


2 Automatic Enrolment: qualitative research with new employers, DWP, February 2020


3 The Pensions Regulator’s data on Automatic enrolment declaration of compliance by constituency, available via the following weblink:


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