3 June 2014

Next month [July] will see the NHBF holding the first of what it hopes will become a nationwide programme of advice workshops explaining to salons the steps they need to be taking to prepare for the arrival of pensions auto-enrolment within the industry.

The workshop, which is being held in Leeds on July 14 from 7pm, has been prompted by a members’ survey that has concluded the vast majority of hairdressers and barbers are completely unprepared for what is expected to be one of the biggest employment changes to hit the industry in a generation.

Under auto-enrolment, employers of all sizes have a new statutory duty automatically to enrol eligible workers into a work-based pension and make an employer contribution towards it. Employers that fail to do so can risk being fined as much as £50,000.

Auto-enrolment has been in place since 2012 but is being only gradually rolled out, starting with the biggest employers first. Many businesses employing fewer than 30 staff will need to auto-enrol their staff from the summer of next year (2015) onwards, although the very smallest employers will not need to begin doing so until 2016, 2017 or even 2018.

But The Pensions Regulator has warned it can take some months to put the right systems in place, particularly for small businesses that do not have HR or payroll support, employ people on a casual or part-time basis, have a high turnover of staff or pay on a weekly or daily basis, rather than monthly.

The fact hairdressing and barbering as an industry has little or no history or experience of offering pensions to employees is likely to be another complicating factor.

The NHBF survey found a worryingly high percentage of employers – 83 per cent – did not know when their staging date was (or the date from which auto-enrolment applies to them), and so had no idea what they needed to do in advance.

There was also widespread ignorance about what auto-enrolment was likely to cost salon owners. Almost all – 94 per cent – had no idea with their employer contributions would probably be.

The Pensions Regulator has said the level of contribution will vary but will normally be somewhere between one per cent and three per cent of an employee’s qualifying earnings.

The NHBF will later this year be launching a bespoke NHBF pension for members specifically to help salons meet their legal responsibilities under the new regime. Several salons have already shown an interest in piloting the new scheme during 2014.

The July workshop will be covering the following topics:

  • What your responsibilities are as an employer
  • How to find out about your staging date
  • Which of your staff you will have to enrol
  • What it will cost
  • What preparations you need to make, for example selecting a pension scheme, checking your software is compatible, monitoring the ages and earnings of staff and communicating with staff
  • What could happen if you don’t meet your responsibilities
  • Options for pension schemes, their advantages and disadvantages

NHBF chief executive Hilary Hall said salon owners needed to recognise auto-enrolment was coming over the horizon fast, and the industry had to respond. As a first step, she urged salon owners to come to the workshop if they could, or to keep an eye out online for future events, which will be listed at www.nhf.info

 Members should also go onto The Pensions Regulator website www.thepensionsregulator.gov.uk and find out what their staging date is, and start planning from there,” she said.


During May The Pensions Regulator published “FAQs” for small business on how to prepare for the arrival of auto-enrolment. This guidance is on its website but is also being published on www.nhf.info

Anyone interested in attending the July workshop should call the membership team on 01234 831965 or email enquiries@nhf.info

What is auto-enrolment?

  • Auto-enrolment is the change to pension provision that means employers have a statutory duty automatically to enrol eligible workers into a work-based pension and make an employer contribution towards it.
  • Eligible workers are those aged over 22 and under state pension age, who earn more than £9,940 per year and ordinarily work in the UK. Employers have a duty to assess all their workers for eligibility.
  • An employer must enrol and pay minimum contributions for any workers aged 16-74 who earn more than £5,668 annually and ask to be enrolled.
  • Any workers aged 16-74 who earn less than £5,668 and who ask to be enrolled must be so, but there is no requirement to pay contributions for them.