ACCOUNTANTS and advisers are being urged to prepare for an expected avalanche of requests for help from clients with imminent auto-enrolment staging dates.
Research from Creative Auto-Enrolment suggests a ‘triple capacity crunch’ now threatens to take hold.
The staging dates – which trigger a company’s automatic enrolment duties – have now begun to kick in and will continue to draw in more companies until February 2018.
The number of employers forecast to stage over the next year will increase 11-fold leaping from 46,300 this year to 512,000 in 2016.
Such a surge represents a real risk for pension providers, The Pensions Regulator (TPR) and business advisers, who could all struggle to cope with the demands for auto enrolment support from the small business community.
The Centre for Economics & Business Research (CEBR) estimates that some 1.3 million smaller employers will hit their staging dates between now and 2018. Of these, around 500,000 will ask an accountant for advice while an additional 360,000 are expected to seek out a financial adviser for guidance.
But just 53% of accountants – or around 17,200 firms – and 84% of financial advisers – some 12,200 outfits – plan to offer auto-enrolment support.
David White, managing director of Creative Auto-Enrolment, said: “Auto-enrolment is a vital scheme to get the nation saving but the sudden jump in in the number of employers staging over the next two years will pose real problems when it comes to adviser availability.
“We have already seen providers changing their underwriting criteria in order to manage capacity, despite the fact that only 5% of employers have been through auto enrolment so far. We are concerned that advisers will be hit next by this wave of enquiries.”
He urged firms not wait until “until the deluge begins” as there is “no extra market capacity”.
The findings follow recent research from Intuit Quickbooks, which showed that the UK’s micro-businesses are struggling to prepare for the implementation of auto-enrolment.
It estimates auto-enrolment costs are estimated to be £8,900 per small business, yet 40% of the UK’s smallest and most vulnerable businesses believe it will cost nothing to set up, while a further 11% think it will only cost up to £5,000.
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