Firms prefer a fine to stakeholder pensions

A third of small businesses would rather pay a £50,000 fine than introduce a stakeholder pension scheme for their employees when it becomes compulsory to do so in October.

A study by the Prudential has revealed that 31 per cent of firms which do not offer employees a pension scheme also do not intend to provide staff with access to a stakeholder pension scheme.

The research also showed that 63 per cent of employers with five employees or more are unaware that stakeholder pensions will be available from April.

More than one in three of the directors of 500 small or medium-sized companies surveyed have no understanding of the new legislation and one in five admit their knowledge is limited.

“There is currently a great deal of confusion surrounding stakeholder pensions. For example there is considerable concern that they will be a huge burden to employers but this does not have to be the case,” said marketing director of Prudential Financial Services Sean Tompkins.

“In choosing a stakeholder pension scheme it is important to consider all aspects of the proposition. For example, 12 per cent of employers we spoke to said being able to use the Internet would be important or very important as this should reduce the operational time and costs for employers.”

By Ben Willmott

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