MILLIONS of workers will have to wait a year longer for help with pension saving from employers after the Government announced in yesterday’s Autumn statement it is delaying reforms for smaller firms.
Under the incoming auto-enrolment programme, employers will be obliged to automatically enroll any employees who meet certain eligibility criteria in a pension scheme which will include compulsory employer contributions.
According to the original timetable, which set out a staged rollout according to the size of the firm, companies employing fewer than 50 people were to be bound by the new rules from April 2014.
However, smaller businesses will now be given until May 2015 to prepare for the new rules and new pension contribution responsibilities.
Pension experts are concerned this delay will worsen the pensions crisis, as small companies will be allowed to go on offering employees no pension at all for a year longer. “This is an extremely disappointing decision, and one that will affect millions.” said Michelle Mitchell from pensioner charity, Age UK. “It is appalling that many employees will miss out on a year’s worth of contributions which will make a real difference to being able to save for a decent retirement.”
Richard Collinson at online retirement planning site, RetireEasy.co.uk said: “Although it is imperative to support small businesses in this economic climate, it is essential that auto-enrolment is seen as critical.”
“Pension savings are at an all-time low and steps to plug the gap should be welcomed. Auto-enrolment is one of the few measures that could help to ensure workers today enjoy a comfortable retirement.”