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What happens if my business doesn't sign up for workplace pensions?

  • Blog
  • 22 February 2017

As an employer, you have a responsibility to help your employees save for life once they’ve finished work.

Laws have been put in place to ensure all staff are signed up to a workplace pension scheme. We explain what happens if your business fails to sign up.

What happens if my business doesn't sign up for workplace pensions?

Auto enrolment

The government has stated that all staff members over the age of 22 and earning £10,000 per year or more should be enrolled on a workplace pension scheme, if they are eligible.

Companies are given a date by which they need to have enrolled their staff on a pension scheme. Failure to comply with this can lead to serious consequences for a business.

Fines and enforcement

Failing to comply can mean your business is contacted with a written notice. This gives you a specific timeframe to rectify any problems and ensure your staff are enrolled.

Following this you can be subjected to a number of fines, from a fixed penalty notice of £400 to an escalating penalty rate, which is a continuing daily fine. This can range from £50 for smaller businesses of one to four employees to £10,000 for companies with more than 500 employees.

The fines work based on the size of a business. But regardless of business size, failing to resolve this penalty has the potential to be incredibly costly and financially damaging to a business.

If a company fine isn’t effective, the Pensions Regulator may be able to pursue the ability to prosecute that business for wilful non-compliance.

How can the FSB help with my workplace pension scheme?

Our guide, How do I sign my employees up to a workplace pension, explains what you need to keep in mind when searching for, and signing your staff up to, a workplace pension. This can help you to avoid running foul of the law and receiving heavy penalty fines.

FSB members also have access to our Workplace Pensions service. This is a service designed specifically to help our members provide their staff with a fully compliant pension scheme.

The service features:

  • Access to a leading pensions provider, Legal & General
  • A one-off charge covering the set-up of your pension scheme, including help and advice, starting at £399 +VAT
  • Our dedicated freephone helpline offering full support and guidance
  • Access to information, education and admin tools for you and your employees
  • Ability to transfer pensions if an employee leaves your company

To find out more about how our workplace pension scheme can help you establish a pension scheme for your business, get in touch with a member of our team or visit our FSB Workplace Pensions page.

FSB Workplace Pensions from FSB

With expert advice and guidance from a leading provider, it's one of the most popular FSB Member Benefits.

Find out more