On the go: In a fluid market, more than half of small and medium-sized businesses have already switched their auto-enrolment provider. Most firms cited value for money or investment performance as the reason for the move.
Rather than being trapped by inertia, smaller businesses view switching providers as normal practice, according to new research from Welplan Pensions.
Welplan worked with Opinium to question 500 senior decision-makers, such as managing directors or heads of finance, at SMEs that use more than 28 different master trust providers.
Its research revealed 54 per cent of respondents have already switched auto-enrolment provider since their original staging date. This was particularly pronounced in medium-sized businesses, where 66 per cent have switched, as well as in construction (67 per cent), business services (70 per cent) and IT (65 per cent).
A further 49 per cent plan to switch provider in future – 20 per cent in the next six months, before employers and employee pension contributions jump from 5 per cent to 8 per cent of salary.
Nineteen per cent plan to switch in the next 12 months and 10 per cent in more than 12 months’ time. Some 38 per cent have no plans to switch − and the rest of respondents do not know.
The research also analysed in detail the full range of motives of the 245 decision-makers who plan to switch.
Value for money considerations were the most important motivation for a switch, while 35 per cent are driven by investment performance, and 34 per cent say ease of transactions are prompting their decision.
Bruce Kirton, chief executive of Welplan Pensions, said: “Business owners want value for money. It’s the main reason why there is such a high level of switching.”
Welplan is currently going through master trust authorisation.
The Pensions Regulator has stated that 30 master trusts have or will leave the market, with 58 having to apply for authorisation by April 2019 or exit in the coming months.
