Business costs will increase when we have to offer pensions say bosses

Bosses up and down the country are expecting their costs to increase next year when government pension auto enrolment plans are rolled out to business up and down the country.

As part of the government’s initiative to get everyone to save for their retirement, every company in the UK will be forced to offer a pension scheme for their staff. The plans, which are hoped will prevent the problems many pensioners now are facing where they have nothing but the state pension to live off, will automatically enrol everyone into a pension scheme, with only those choosing to opt out not paying into a scheme.

An IoD (Institute of Directors) survey has found that a round a third of business owners are worried that the three per cent contribution to employees pension schemes they will have to make will eat into their profits, while 57% expect the pension schemes to be a high, or very high burden on their time.

The smallest companies are expected to be hit the hardest, with 95% of SMEs not having a pension scheme at the moment.

Director General at the IoD, Miles Templeman explained, “Of course we need to improve retirement provision in the UK, but yet again it’s the small entrepreneur who is hit.

“Since the government isn’t prepared to change course on what’s essentially a major piece of employment regulation, it needs to compensate for this burden with an equally significant deregulation elsewhere. Phasing in auto-enrolment buys us some time, but the private sector can’t be expected to bounce back and create new jobs in the longer run if the government keeps dropping new cost burdens on firms.”