Thanks to a freedom of information request by the Startups.co.uk website, it was this week revealed that the average fine issued to small businesses for failure to comply with auto enrolment is £540.
The data, which has never been released before, reveals the average value of both Escalating Penalty Notices (EPN) and Fixed Penalty Notices (FPN). These were issued to firms that failed to auto enrol their employees into a suitable workplace pension scheme up until the end of April 2017 for EPNs and the end of March 2017 for FPNs.
The average fines for small businesses were smaller than those issued to larger companies, the figures revealed. Small businesses that employed up to 30 members of staff were issued with an average fine of £540, whereas businesses with a headcount of between 31 and 250 staff were hit with fines averaging £990. The largest businesses in the UK with more than 250 employees have been hit with average fines of £1390 for not complying with auto enrolment. However, when these figures were released these fines had not all been paid so there is every chance that their value could rise if not met.
Darren Ryder, The Pensions Regulator director of automatic enrolment, said: "There are more than 800,000 more employers whose duties are still to begin over the coming months. I would urge each and every one of them to check what they need to do and when they need to do it so they can seek our help if they need it. All employers have legal duties and can use the duties checker to understand exactly what they must do."
This news comes just a few weeks after The Pensions Regulator revealed that 800,000 UK businesses are yet to be auto enrolment compliant. However, although it is disappointing that fines have had to be issued to companies that have refused to become compliant with the auto enrolment regulations, it is clear that overall auto enrolment has been a success with a much bigger take up than ever expected, resulting in millions more people saving for retirement.