Top UK auto enrolment pension providers
Finding the right auto enrolment pension provider can be difficult, but this guide should help you to understand a little more about the options
For employers, especially smaller ones, auto enrolment pension providers can seem daunting – everything from choosing the right provider to understanding your requirements can be confusing, but this article has been designed to help.
This article covers schemes offered by a range of auto enrolment pension providers to help you make sense of what you need.
Top UK auto enrolment pension providers
Choosing an auto enrolment scheme and company specifically suited to small businesses is essential. With a vast array of auto enrolment pension scheme providers it can be difficult to short list and choose the best option.
We have selected our top 5 UK auto enrolment pension providers who offer excellent provision for small businesses to make the decision easier for you.
The table below includes a very brief comparison of the top auto enrolment companies included on this page – take a look now to find out more about each.
|Smart Pension||London||2014||No upfront costs & compatible with a range of payroll software|
|NEST||London||1998||Government run with low fees|
|Now: Pensions||Denmark||1964||Straight-forward & easy to set up|
|Creative Auto Enrolment||London||N/A||One-stop-shop online solution & ongoing support|
|The People’s Pension||Sussex||2011||Designed for small businesses & no ongoing fees|
|Aviva||London||2000||One of the most popular providers in the world & accessible by any size business|
For more information about the providers included in the table above, simply continue down the page.
Smart Pension offer an auto enrolment pension scheme for small businesses without any upfront charges, making it an enticing and worthwhile option for many small businesses in the UK.
Smart Pension do not have many fees at all compared with other workplace pension providers.You will pay an Annual Management Charge of 0.75%, but there is no lock in, meaning it won’t cost you to leave at any point.
Smart Pension advanced technology platform is ahead of the curve, ensuring a fast and secure service. This means that the Smart Pension scheme is fast and easy to set up, and takes much of the legwork out of assessing your staff, generating letters and communications. They are also on hand to offer you all of the advice you need to become compliant.
Additionally, you can choose between the Smart Pension workforce assessment tool, or your own existing payroll software. The scheme is compatible with a range of payroll software including Sage.
All Smart Pension funds are invested in blue chip providers like Legal & General, meaning that there are reduced risks. They offer a secure investment choice, and are rated 5 stars by Defaqto as well as being Master Trust Assurance Framework (MAF) accredited.
Smart Pensions have a team of experienced professionals who have a strong track record of successfully managing funds.
NEST is the National Employment Savings Trust set up by the government to facilitate auto enrolment pensions. It has been created specifically to meet the needs of auto enrolment, and is therefore an attractive and straight-forward option. There are no shareholders or owners, making it a unique option in that regard and able to keep its fees low.
NEST operates through an online platform making it easy, efficient, and fast. Workers can login to view their own pension savings, and employers will find it compatible with payroll and easy to administer.
NEST is free for employers to use in terms of both set up and ongoing costs, and members of the scheme are charged in accordance with a clear pricing structure for whichever fund they opt for. There are a range of options and products to choose from, meaning there is no ‘one-size-fits-all’ approach. In addition, they do not charge for transfers in and out of NEST either.
As NEST do not need to make a profit for shareholders, their charges are designed to only cover their running costs. Charges for members are broken down into two parts: an annual management charge (AMC) or 0.3% and a contribution charge of 1.8% on each contribution made to the scheme.
Now: Pensions is proving to be a popular choice for small businesses looking to set up their auto enrolment company pension scheme. They offer a relatively straight-forward and easy to set up system, but their fees need slightly more understanding. They enable you to meet your obligations with regards to auto enrolment whilst also removing much of the administrative burden.
The setup process is web-based, making it quick and easy, and a support team is on hand to help should you need them. They also have Master Trust Assurance. Through their Pensions Gateway site you can be sure of security as well as 24-7 access.
You, as the employer, will need to pay a monthly employer’s service charge which covers the scheme set-up and ongoing support, as well as communications. Additionally, members of the scheme will be subject to a monthly active member fee which is dependent on their earnings.
Creative AutoEnrolment endeavour to take all of the hard work out of the workplace auto enrolment pension requirements for you by offering a complete ‘one-stop-shop’ online solution. Their offering includes not only the pension scheme set up but also the ongoing communication and administration. In addition, both you and your employees have access to a dedicated helpline enabling you to access support if needed.
Creative AutoEnrolment operate slightly differently from other providers in that they manage the auto enrolment process after you have closed your payroll run meaning that it will never risk interfering with the usual process. Communication between your payroll and Creative AutoEnrolment is vital for this to work.
Creative AutoEnrolment invest all of your member’s contributions into Scottish Widows, offering security and reliability.
Fees include a setup cost which is levied as a £20 per month (plus VAT) fee no matter how many workers you enrol, making it ideal for small and growing businesses. Employees also pay fees of 0.4% per month.
The People’s Pension
The People’s Pension is designed specifically with small businesses in mind, aiming to make auto enrolment straight-forward and easy. Nonetheless, it is hugely popular and is the largest private sector auto enrolment scheme with 2 million members. It is a supported service which guarantees full compliance with your employer obligations under the current legislation.
For employers there is a clear one off setup fee of £500 plus VAT, which can be reduced to £300 plus VAT if you go through a business adviser. There are no ongoing fees. Employees who are members of the scheme will have a 0.5% management fee.
The People’s Pension is a valuable choice for small businesses because of its clear upfront pricing structure, as well as the support offered to ensure you are compliant and meet the relevant regulations. UK based support is on hand, and their communication is excellent.
There are two different sign-up options for employers. Choose from ‘Simply Comply’ if you pay your employees weekly or monthly, or ‘Simply Tailor’ if you need a more bespoke arrangement with different amounts paid in for different employees, or need to enact postponement.
Aviva is a British multi-insurance company with a London HQ. Founded in 2000, the company has grown to become one of the largest pension providers in the world, with around 33 million customers across 16 countries. Aviva’s service offers a range of features, and also provides access to various insurance options, which can help businesses to ensure that every aspect of their responsibility – in terms of both auto enrolment and pensions, and workplace insurance too.
Aviva’s auto enrolment service is fast, simple and can be accessed by any size of business; it is not kept just for the largest or smallest companies, but can help any size operation at all. It only takes ten minutes to apply for the pension service, and once you have completed this part of the process, the rest will be handled externally, with minimal input from you.
As well as offering a top-range service, the Aviva pension packages available include 200 investment fund options, including ethical and sharia. Additionally, your staff will be able to access a free online management dashboard, along with having a 20% discount on other Aviva products.
Why does my company need pension auto enrolment?
Pension auto enrolment is a Government led initiative in the UK to ensure workers are saving enough for their retirement. Their aim is to ensure that everyone who can be saving for retirement is doing so, automatically.
In the past, the onus was on individuals to voluntarily sign up to a pension, or for an employer to encourage employees to join their company pension schemes. Employers did not even have to offer a company pension scheme in the first place. Now it is not a choice, it is obligatory.
Now, the requirement is on you, as an employer – even in a small business – to provide pension scheme auto enrolment. It is compulsory – you must automatically enrol eligible workers, and contribute.
The requirements for workplace pension auto enrolment have been being phased in over the last few years since October 2012. By the beginning of February 2018 all eligible workers in the UK should have been enrolled into a workplace company pension scheme.
As a small business, you will have been given a specific date by which you need to have selected an auto enrolment pension scheme and to have enrolled eligible workers. This will be a much later date than other bigger employers who have likely already faced, and scaled, the hurdle. This date is referred to as the ‘staging date’. If you do not know your date, do not worry. Our experts can put you in touch with top auto enrolment providers who will be able to help you.
As a result of the staging dates, it is vital that you review auto enrolment providers and small company pension schemes as soon as possible in order to make the best possible choice for both you as an employer, and for your workers.
Which auto enrolment pension provider is right for me?
When considering auto enrolment pension scheme providers, it can become confusing and difficult to work out which company and scheme will work best for your business. There are a number of different factors you need to consider:
It seems obvious, but not all schemes or providers are actually auto enrolment pension providers. Auto enrolment providers are those which offer schemes which facilitate automatic enrolment of eligible workers into the scheme. Your employees should not have to do anything to facilitate this.
Your chosen auto enrolment pension scheme must be tax registered in the UK.
You will be required to meet minimum contributions to the scheme. This will depend on the nature of the pension auto enrolment scheme you choose. Some have lower minimum payments than others.
Additionally, you will need to decide whether you wish to make just the minimum legally required contributions for your workers, or to go above and beyond.
Default fund charges
The default fund charges with the workplace pension scheme providers you choose must be within the 0.75% charge cap which has been set. You also need to consider the different investment options available, and how secure the options will be.
Payroll administration and compatibility
Your chosen auto enrolment pension scheme should be straightforward and easy to administer within your payroll service. This means your payroll provider or in-house service needs to be able to provide the scheme provider with the relevant data and information, and/or process and handle the administration for the scheme.
Will your chosen scheme communicate directly with, or help with, communications to employees about their auto enrolment pension?
You should also consider whether the automatic enrolment pension scheme you select offers administrative support, including processing opt-ins, or assessing eligible workers.
Check whether your current scheme meets the requirements of a government pension auto enrolment scheme. Also consider whether it is best for your business and employee needs compared to other options.
The auto enrolment providers and auto enrolment companies which offer the right choice for your business will likely differ compared to a different organisation. This is particularly true when considering small company pension schemes. Choosing a scheme specifically suited to workplace pension auto enrolment in small businesses is essential.
Selecting an auto enrolment pension scheme provider
Small UK businesses need to ensure they are ready to meet their obligations under the auto enrolment pension regulations. This can seem confusing and daunting, but you must be ready and automatically enrolling workers by your staging date to avoid hefty fines.
Start by considering the above top 5 UK auto enrolment pension providers against the factors which specifically affect you.