There’s one thing you can be sure of…

The hundreds of thousands of employers who need to ensure they comply with automatic enrolment over the course of the next year will do so in a number of different ways…

Some will try to comply themselves without any support.

Some will take the potentially expensive but also reassuring route of engaging with a professional to support them and ask them to complete all the work required to help them comply both an initially and ongoing basis.

and

Many will get support but from relatively low cost solutions.

There are a number of solutions, like AE in a Box, which charge the employer for the service it provides.

Now we believe that the £29+vat per month we charge represents really decent value for a small employer who want to ensure they are aware of what they need to do both now and on an ongoing basis so they don’t incur fines of £50 – £500 per day (depending on the number of employees within their business)

However we’re also aware that there are plenty of propositions available often linked to pension products which are available for ‘free’ (there seems to be loads popping up too!).

Free’s always attractive isn’t it? However when it comes to automatic enrolment we believe it’s better for employers to pay for a service…

Firstly, ‘free’ when it comes to automatic enrolment is never actually ‘free’.

If you’re an employer (or a professional who helps employers) using one of the ‘free’ propositions you may not be paying a monthly fee however the reality is that these businesses have to make money to continue to run.

Often the ‘free’ automatic enrolment propositions come with a pension attached and often the charges made on the pension are designed to subsidise the rest of what this particular provides…in particular the elements which helps an employer complies successfully (support with complying with the regulation).

Secondly, many of the ‘free’ services have a questionable business model. To make a ‘free’ automatic enrolment work you need a huge amount of money being looked after by the pension scheme.

This means that for any ‘free’ model to work it needs to have grown to a stage where it’s sustainable for the longer term. This means that some of the ‘free’ automatic enrolment models (or even many of the ones which are linked to a pension scheme and charge a relatively small amount)  will succeed and many will fail as the commercial pressures of running a ‘free’ pension scheme without initially having enough money in hit home.

At this stage it’s too early into the small and micro auto enrolment market to know which of these pension linked propositions will eventually develop enough scale to succeed and which ones won’t!

It’s one of the reasons why we ensured that through AE in a Box we decided not to start offering our own pension and only partnered with pension providers we were sure had sustainability and a long term commitment to the marketplace.

You see we wanted to ensure our business model was based on transparent, low, fair levels of fees per employer and whilst there might be some employers might want to solve the automatic enrolment issue for ‘free’. The reality, which is worth remembering, is different…

Often, in hidden charges, or time, or hassle, or reliability…..often ‘free’ is anything but.