Over three quarters of employers do not know how much it will cost to implement auto-enrolment, according to pension and benefits consultants Hymans Robertson.

Some 83 per cent of employers did not know the overall costs of auto-enrolment including contributions and set-up costs.

For a company with 7,500 employees, it is expected to cost £3m in set-up and contributions, assuming that 60 per cent of staff are not currently members of the pension scheme and an opt-out rate of 30 per cent.

This is broken down into £2.5m for cash contributions, £300k for setting up systems, £120k for communicating the message to employees and the cost of in-house resources.

The firm surveyed HR and finance directors at UK companies with over 5,000 employees.

Only 17 per cent were confident they knew how much auto-enrolment would cost overall and only nine per cent knew the set-up costs. A third said they knew about costs of extra contribution.

Despite this lack of knowledge, 55 per cent said they were confident they would have enough budget for the set-up and contribution costs.

Lee Hollingworth, head of defined contribution consulting at Hymans Robertson, said: “To us this is a clear sign that organisations haven’t begun preparing yet. If they don’t know the costs, how can they know if they will have the budget?”

Mr Hollingworth recommended that companies should be planning their budgets for set-up now and for contributions in mid-2012 as the recommended length of time to prepare is 18 months.

Auto-enrolment is expected to begin in October 2012.