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Auto-Enrolment Could Slow Business Growth

Auto-enrolment costs could stall the growth of small and micro businesses, according to a survey commissioned by Enrolsme.

The poll, conducted among firms employing between 1 and 50 workers, found that the increased costs related to auto-enrolment would impact on pay rises and bonuses in 37% of small businesses.

This rises to 43% of companies that employ less than 6 workers.

Due to the need to implement and manage auto-enrolment:

  • 26% of small and micro businesses will not be able to hire more staff
  • 19% will be forced to invest less in their business than originally planned
  • 34% say they will have to increase the price of goods and services
  • 11% think they may lose their businesses, rising to 21% of micro businesses.

Matthew Mitten, director of Enrolsme, said:

“These are worrying trends, given small businesses are the lifeblood of the economy. Employment in this sector may be affected with a third claiming they won’t be able to recruit more staff; and almost one fifth telling us they will have to reduce their investment plans.

“However, even more concerning is the portion of small companies that believe automatic enrolment could see them going out of business all together [sic]. This was certainly not the goal of the legislation. These are tricky times for small business in the UK and more should be done to help support them.”

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