Auto-Enrolment Costs: Set-Up and On-Going Costs. Don’t Pay Over the Odds
With auto-enrolment continuing to press-on for SMEs, most companies will know what they need to do and by when to comply with Workplace Pensions. If this can be done in-house, so much the better, but quite often for SMEs there is neither the in-house experience nor time to do so, which often means going outside to get help and advice.
Of course, this is a perfectly acceptable thing to do, if you know the right people to help you. Unfortunately, we have been hearing of some very high charges being made for set-up and on-going work. Here at JLP, as payroll services and auto-enrolment experts, we believe you will find our prices very cost effective.
What Are the Costs of Auto Enrolment?
Auto-enrolment costs split into two broad categories: Set up costs and on-going costs.
Set up Costs cover:
- Advice on choosing the pension provider. We are not pension providers nor Independent Financial Advisors, but we do know and can recommend advisors who can help you make this choice. The Pensions Regulator says that typical charges for smaller companies for this type of advice is between £200 and £1,000. We’ve heard of much higher charges than this, so shop around and contact us if you would like a chat.
- Pension Scheme Set-up. The Pension Regulator suggests that this can cost £500. Again, we’ve heard of figures much higher than this. Our cost is a one-off charge of £100 (plus VAT).
- Payroll Set Up. If you don’t have an in-house HR or finance department then you’ll need to be sure that your outsourced payroll services supplier’s service is set up to accommodate all the requirements of auto enrolment. Our system is and we don’t charge any extra for setting your company up for auto-enrolment payroll. Typically, we’ve heard figures of between £100 and £400 being mentioned for this, sometimes much higher.
Obviously, one on-going cost is the amount that employers pay into employees’ workplace pensions, but that is set at a minimum amount by the legislation and is unavoidable. Currently the minimum monthly amount employers must pay into employees’ workplace pension is 1% of gross earnings. There are lower and upper earning bands – £5824 pa – £43000 p/a – which are classed as standard qualifying earnings.
Running a Workplace Pension Scheme. As with the pension provider scheme set-up cost mentioned above, this is not our area, but we are aware that some providers charge a fee for on-going monthly scheme administration, and these charges can be high. If you chose well at the set-up stage it is possible to avoid these on-going charges. Talk to us for some friendly advice in this area.
On-going correspondence and reporting. We have heard of some outsourced payroll service providers charging up to £100 per month for this service, on top of running the payroll itself. Our service deals with all correspondence and uploading all pension reports for our clients for a charge, on average, of £25 (plus VAT) per month.
Contact us for Auto-Enrolment Help and Advice at Sensible, Affordable Prices
If you run a small business and outsource your payroll requirements and are looking for a provider that can also help you with auto enrolment who just gets on with the job and doesn’t charge high prices, please contact us or call us on 0121 422 0550 for an initial chat.