A study from software group IRIS has found 59% of businesses are unprepared for auto-enrolment, with this figure increasing to 90% among firms with under 100 employees.
By 2017 all employers should have enrolled their staff in a pension scheme. A lot of larger companies have already begun complying with the change, with smaller companies following suit over the next months and years.
The study also found 53% of SMEs don't know when their staging date is.
Mark Paraskeva, CEO of IRIS payroll division, said: "These figures are quite worrying, with such a lack of knowledge and preparation for such a huge change.
"We get the impression that many smaller businesses think auto-enrolment will not affect them or that they don't need to worry about it yet.
"Experts are suggesting that employers start preparing 18 months before your staging date, so a large proportion of employers may already be past this deadline and not even aware of it."
Paraskeva added: "The main piece of advice we are giving businesses is to educate themselves on the legislation, why it is being introduced and the effects it will have on their operations."
