The Best Auto-Enrolment Pension Providers for UK Small Businesses

Small businesses need to offer their employees suitable retirement plans. One of the best solutions is an auto-enrolment pension scheme. This is a significant business decision, but it can be challenging for a small business to know how to select the most appropriate provider. Fear not, we’ve got you covered!

Choosing the Right Provider Is Key

When selecting a pension provider, it’s important to consider factors such as usability, compatibility and costs. Whether your business needs a pension provider with minimal upfront costs or a scheme that’s easy to set up, we’re here to help.

Choosing the right provider is not just about picking the one with the lowest fees. It’s also vital to ensure that the provider aligns with your company’s needs and objectives, and can offer the necessary support to both your business and your employees.

Provider #1: Smart Pension

Smart Pension stands out with its no upfront costs and compatibility with various payroll software. Their advanced platform offers a secure service and easy setup. Furthermore, it’s attractive that they invest funds in recognised providers like Legal & General, offering minimal risks. However, depending on your membership, some ongoing charges might apply.

I actually don’t like Smart Pension very much - it’s quite beige, and it doesn’t offer me enough options on how to invest my money, compared to my SIPP for example.

Provider #2: The People’s Pension

The People’s Pension is designed especially for small businesses. It simplifies auto-enrolment and doesn’t charge ongoing fees. However, there is a single setup fee. The great advantage is that it provides a support team based in the UK, making it convenient for local businesses.

I’ve never used it, but it does look great for SMBs!

Provider #3: NEST

NEST is a government-run scheme providing a wide range of options and products without setup and ongoing costs for employers. It features low fees and an easy-to-use online platform. However, since it’s designed specifically for auto-enrolment, it might not be the best choice for businesses wanting multiple services from the same provider.

NEST was good actually, good customer service, easy to transfer out if you’re amalgamating old pensions into one (top tip for employees - definitely do this!)

Provider #4: Now: Pensions

Now: Pensions offers an uncomplicated setup process, making it popular among many small businesses. However, its pricing structure is slightly more complex than some other providers and there’s a cost to employers for setup and ongoing use.

Provider #5: Creative Auto Enrolment

Creative Auto Enrolment provides a one-stop-shop online solution with support available via a helpline. Yet, their online solution might not be suitable for all types of businesses. They offer a whole suite of services which detracts a little from their pension offering.

Provider #6: Aviva

As one of the most popular providers worldwide, Aviva offers a service that’s accessible for any size of business. Despite that, some start-ups and small businesses might feel lost among their vast customer base.

Note: No link provided as their website is very hard to navigate, I’d avoid if you’re looking for straightforward user experiences. Size is a disadvantage here from my perspective.

Provider #7: L&G

L&G are HUGE, like aviva. Difficult to navigate, but actually quite user friendly once you’re sorted. I also found L&G customer service to be good (but not fast), and it has had the best range of investment choices of any workplace pension scheme I’ve been a part of over the past decade.

Legal Considerations

The legal aspect of picking a pension provider is crucial. You must ensure that your chosen pension scheme meets all legal requirements, such as being registered for tax in the UK, meeting minimum contributions, and offering services that facilitate automatic enrolment of eligible employees. Obviously these providers also want to meet these targets so it’s a shared burden really.

You must also evaluate the default fund charges to ensure they comply with the 0.75% charge cap.

Again - personal opinion - the most expensive workplace pension I’ve had has been with Scottish Widows. Lovely company and origin story (especially for the stats buffs - hello Bayes rule), but it’s not for me.

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Making Your Choice

When choosing an auto-enrolment pension provider, it’s not just about ticking boxes. You need to consider the unique needs of your business and workforce. By making a thoughtful choice, you enhance your business’s legal foundation, reduce potential risks and better cater to your employees’ requirements.

Using an AI legal assistant like Genie AI can also help you evaluate the terms of each provider, helping with the decision-making process. Genie can aid in drafting, reviewing, negotiating and signing any legal agreements connected to your chosen pension provider.

Conclusion

Carefully choosing an auto-enrolment pension provider is a critical step in ensuring your team’s long-term financial stability, while also keeping your business in line with legal obligations. A well-chosen provider can help to reduce risk, improve the legal foundations of your business, and ultimately lead to happier, more satisfied employees.

For more help and information on all things legal for your business, signup to Genie AI – an AI Legal Assistant for Drafting, Reviewing, Negotiating and Signing Legal agreements.

Final Note

Don’t forget to check out The world’s largest open source legal library, to access a wealth of legal knowledge to benefit your business.

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