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news opinion
Pension auto-enrolment is sneaking up on SMEs, and it’s surprising how many small and medium- sized enterprises are unprepared for the event
Workplace pensions must be generally regarded as a good thing. We are, after all, living longer, and therefore likely to need pension income for a good number of years – perhaps as many as 30. And yet, we are woefully untroubled by what is expected to be a major economic crisis in the years ahead.
Auto-enrolment aside, successive governments have been reluctant to tackle the pensions issue. They have, for instance, allowed many pensioners to become shackled by uncompetitive annuity schemes that have denied older people the pension income they are fully entitled to.
Of course, the problem of funding pensions is a global, rather than just national, one. The funding gap is
there because young people are tending to start work later and are thus paying tax later, and this while older people are perhaps having 30 years of retirement.
No wonder a report by a leading professor at University of Southampton recommends the worldwide removal of a fixed or default retirement age (DRA). The UK abolished the DRA in 2011 but many other countries still have it, and that is unsustainable for the global economy.
Here, our current focus is on auto- enrolment. At a recent seminar hosted by law firm Blandy & Blandy, a good number of people in the audience said they didn’t support automatic enrolment.
That’s probably because the Government hasn't done enough to simplify the process for employers. The jargon itself could be clearer, the benefits could be better explained.
What we must remember, meanwhile, is that auto-enrolment is ensuring that for many, some money is being put aside for retirement for the first time. That’s got to be a good thing.
David Murray, Publisher
Growth momentum sustained
January’s PMI data from Lloyds Bank signalled a sharp expansion of output at private-sector firms in the South East, marking the 13th consecutive month of growth.
The headline Lloyds Bank South East Business Activity Index – a seasonally- adjusted index that measures the combined output of the region’s manufacturing and service sectors – posted at 61.5 in January, up from 60.1 in December. While remaining below November’s survey-record high, the pace of expansion had accelerated from December and was sharper than the UK average. Panellists commonly attributed the latest increase in business activity to promotional activity, increased export volumes and an expansion of domestic demand.
Incoming new business increased for the 13th consecutive month in January, though the rate of growth eased from December. Anecdotal evidence suggested that increased export demand and a continuing
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domestic economic recovery were contributory factors behind the latest increase in new business.
Employment in the South East’s private sector grew for the 10th consecutive month in January. Though the pace of expansion eased from December’s near 161/2 year high, it nevertheless remained strong.
Meanwhile, backlogs of work rose for the seventh consecutive month in January, and at the sharpest rate recorded in the 14-year series history. Of the respondents that reported higher levels of outstanding business, a number attributed the latest rise to supply-chain issues resulting from increased demand.
Average input costs rose for the 18th month running in January, though the pace of inflation eased marginally from December. Respondents cited higher energy tariffs and increased transport costs as contributory factors behind the latest rise in input prices.
Concurrently, January saw prices charged increase at the sharpest rate in over two-and-a-half years. Goods producers saw the sharper rise in output prices, while the increase in charges at service providers was more modest.
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