The Pensions Regulator (TPR) announced a massive rise in the number of fines for pension non-compliance issued to UK businesses. This dramatic increase is attributed to greater numbers of SME’s reaching their staging dates than ever before.
TPR reported in its latest quarterly update (June to September 16) that it issued 3,728 fixed penalty notices, more than triple the 861 in the previous quarter. These fixed penalty notices come with a £400 fine for failure to comply with a statutory notice or some particular employer duties.
From June to September 15,073 compliance notices were issued, to remedy a breach of one or more automatic enrolment employer obligations, a 344% increase up from 3,392.
In some cases, TPR also issues businesses an escalating penalty notice of fines between £50 and £10,000 per day for failure to comply with a statutory notice. In the last quarter, TPR issues 576 of such notices, up from just 38 the previous quarter. TPR said this rise was ‘very small’ in comparison to the number of compliance notices, or to the number of employers staging. Less than 5% of these compliance notices progress to an escalating penalty notice.
TPR said: ‘Between July and September this year, we’ve had to use our powers more often, as increasing numbers of small and micro employers reach their staging date (deadline for having a qualifying workplace pension in place) and leave it to the last minute to prepare. Although the number of compliance notices has risen to over 26,000, we find the majority of employers subsequently comply when given this “nudge” to remind them of their duties.’
Employers and their advisers yet to ‘stage’ need to realise the requirement to install a workplace pension is not going to go away and that they must take action at an early date.