Automatic-enrolment of pensions – do I have to?

It’s great that our generation stands a good chance of living until we’re 80, 90 or even 100 years old. It’s wonderful that we’re getting closer to cures for cancer, that we are fitter, healthier and stronger than our forebears. However, longevity comes at a cost. How can the treasury afford to support us all in our retirement when, at any one time, approximately half the population isn’t actually working or paying any income tax?

The answer is – it can’t.

It’s a frightening fact that 53% of the UK workforce today has no other pension provision than the state pension. If we’re to avoid extreme pressure on the UK economy, or extreme poverty for pensioners, action needs to be taken to encourage workers to engage in retirement planning from an early age.


Introducing automatic enrolment also known as auto-enrolment: a new law on workplace pensions requires employers to automatically enroll staff into a pension scheme and make regular contributions into the pensions of the eligible staff if they are:

  • Over 22 years of age
  • Earning more than £10,000 per annum (and over 16 years of age)
  • Working in the UK

In other words, almost all businesses (with a very few exceptions) must have a workplace pension by the time their notified staging date comes round and before the law comes into force in 2017. The consequence of NOT doing this are immediate and heavy fines that can mount up to several £1000’s in less than a month.

Blenheim Chartered Accountants and Business Advisers have been preparing for auto-enrolment since it was first announced. We’ve already met with the Pensions Regulator, the Minister for Pensions, the main pension providers and joined the Friends of Auto-Enrolment. We’re ready for it, and we’ve been running workshops for our clients to help them get ready for it too.

Get in touch today to discuss the impact of auto-enrolment on your business.

When the worst happens…why losing your biggest client isn’t the disaster you might think

It’s happened…you’ve lost the customer that provides 40%+ of your annual revenue. Many business owners have been in exactly that situation, and I expect to see at least one of my clients facing this every year.  When it happens it’s only natural to fear the worst – “This will mean the end of my business?”; “I’m going to have to let all my staff go”; “I’m not going to be able to take enough money out of the business to live on”.

But in my experience it’s not really the end, it’s the beginning of a new chapter in your business that will eventually make it better and stronger. So if you’re currently facing  this sort of situation, or fear that you might be at some point soon – I’d encourage you to read on.

Step 1 – Sit down, breathe.  Once you get over the shock and possibly the anger, it’s time to sit back and calmly assess the situation.  Your accountant can help you to see just how long your finances will sustain the business – and it’s nearly always longer than you think.

Step 2 – Take stock of the situation you were in.  Ask yourself the following questions (I think you’ll be surprised by the answers).

  • How much of your time has been taken up by this customer?
    Often you will find that they actually occupy well in excess of the percentage of income that they bring in. You find yourself going out of your way to spend that ‘little bit of extra time’ to keep them happy.
  • Did you charge for ‘the little extras’ that you gave to them? Probably not!
  • Have they been taking advantage of the fact that they are your biggest customer by making the time between payments longer and longer? If this is the case, have they really appreciated what you’ve done for them in any case?
  • Have you been charging them at a ‘special rate’? The answer is ‘almost certainly’.

Step 3 – Work ‘on your business’ rather than ‘in your business’; with that big client gone you’ll probably have a bit more time to do it. Some areas to consider might be:

  • Pricing: are you charging enough for the products/services you provide? Too many small businesses undervalue what they do.
  • Products: are there other products/services that I can offer to my existing and new potential customers that will be more profitable?
  • Promotion – spend some money on marketing! It might sound odd that an accountant is suggesting you spend more money at a time like this – but trust me it’s important to your recovery. Don’t think of it as a cost but an investment in your future income.
  • Firm up your other customer relationships – maybe ask them for feedback to help you improve your products and services. With happy customers you can also ask for referrals; if they are happy with what you are doing for them they should be more than happy to provide a recommendation for you.

Step 4 – Move on!  Rather than sitting back and moaning about how your ex-customer has ‘ruined the business’ change your outlook and be grateful for the opportunity (and more importantly the time) to make your business better and more profitable.