Nearly 8 in 10 advisers expect growing numbers of pension providers will not offer their auto enrolment schemes to businesses with fewer than 30 employees.
That was the conclusion of research conducted by Defaqto on behalf of NOW: Pensions. Of the 248 advisers questioned by Defaqto, 33% already believed there has not been enough pension provider choice for employers implementing auto enrolment with 82% claiming that providers have been cherry picking auto enrolment business.
Over two thirds (67%) of the advisers surveyed expected to see a growing number of pension providers introducing an employer charge for auto enrolment, with 69% claiming that a charge would not necessarily deter them from recommending a scheme.
Of the auto enrolment schemes that advisers have written so far, guaranteed acceptance was the most important factor cited by nearly a third (30%), closely followed by the level of charges cited by 29%.

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Morten Nilsson, chief executive of NOW: Pensions, said: “Auto enrolment is working but its biggest challenge is yet to come. Owners of small firms will have little or no experience of pensions and will be fitting auto enrolment in around their other day to day responsibilities.
“These firms are going to need considerable help both setting up their schemes and with ongoing administration.
“For many providers, the effort involved with administering these schemes won’t be worth it. Widespread cherry picking is already occurring but as smaller firms reach their staging dates, it’s like that growing number of providers will close their doors altogether.”