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Firms that ignore auto-enrolment risk daily fines

The Pension Regulator is warning employers not to ignore penalty notices because they risk a fine that increases on a daily basis.

While auto-enrolment compliance rates remain high, the latest quarterly compliance and enforcement bulletin from The Pension Regulator (TPR) shows that the number of Escalating Penalty Notices it issues is on the rise.

An Escalating Penalty Notice (EPN) is one of the statutory powers TPR has to help maximise employer compliance with automatic enrolment duties. It specifies the date by which the employer must comply with certain actions or be subject to a fine that builds up at a daily rate.


The fine for small employers with one to four staff who fail to comply with an EPN is £50 per day and for those with five to 49 employees it is £500 per day.


According to TPR, more than 95% of the first small employers required to put their staff into a workplace pension have now complied with the law.


Baroness Ros Altmann, Minister for Pensions, said: 

"Automatic enrolment is delivering fundamental change to workplace pension saving. So far over 100,000 employers have enrolled over six million workers. Levels of compliance amongst employers has been consistently high and I am pleased with all the steps The Pensions Regulator has put in place to support the huge number of smaller employers who have recently begun to undertake their duties.
"The aim of automatic enrolment is to get all employers setting up pension schemes for their staff," she added. "It is most encouraging to see that even the smaller employers are managing to do this, and the proportion facing enforcement action has stayed remarkably low."

Charles Counsell, Executive Director for Automatic Enrolment at TPR, said: 

"Most employers comply on time and we continue to see compliance rates in the high nineties. Others need a nudge and are prompted to meet their duties when one of our notices comes through their letterbox. Our message remains that if things aren't going well, then talk to us; don't ignore us."

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