The UK Government could make £3.86bn in a ‘windfall bonus' from stakeholder pension non-compliance, according to figures published by Legal & General.
The government will collect the windfall from all employers with five or more employees who do not offer access to a stakeholder pension by October 6 2001 - after which date Opra can fine offending firms up to £50,000 each.
The figure is calculated by working out the number of employers who do not currently offer a pension scheme - from the survey’s sample size of 1000 employers - and either do not intend to do so or who claim to be still undecided.
Legal & General’s pension strategy director Adrian Boulding said small employers particularly have got to get their act together if they don’t want to fall foul of the stakeholder legislation and end up paying part of this huge ‘windfall bonus’ to the Exchequer.
Boulding said: “This figure should act as a wake-up call to employers and to advisers. Our figures show that there are upwards of 424,000 firms in the United Kingdom employing between five and 49 people who do not currently offer their staff access to a pension scheme.
“And 31% of those who said they intend to seek advice would do so from an IFA, compared to 29% from a bank, 14% from an accountant and 13% from a pensions company. There is a lot of advising to be done in the next six months.”
Legal & General’s survey figures also show that even though firms employing less than five people are exempt, more than one in five employers intend to offer stakeholder pensions.
The survey was conducted between 25 January and 16 February 2001.
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