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Category: Pensions Date: 11/28/2011
The Department for Work and Pensions has confirmed that small firms are to be given another year to prepare for auto-enrolment pensions.
Companies with 50 or fewer employees have been told that they will now have until May 2015 until staff are automatically enrolled onto a pension.
Under the previous timetable, small firms had been due to begin auto-enrolment in April 2014, and it is thought that the move will affect around four million workers.
It means that no small firms will have their staff enrolled on new schemes during this Parliament.
"We recognise that small businesses are operating in tough economic times so we are softening the timetable for implementation to give them some additional breathing space," said Pensions Minister Steve Webb.
"This is a sensible step that ensures long term pension issues are addressed while meeting the short and medium term needs of small business.
"We are committed to ensuring the employees of these small businesses get the chance to save and that is why no one will miss out."
The Government still intends on bigger firms beginning the auto-enrolment process from October next year.
The TUC has criticised the move, calling it a 'grave disappointment'.
"It is further confirmation that this government sees small business staff as second class workplace citizens, not deserving of the same rights as staff in bigger firms," said Brendan Barber, general secretary of the TUC.
"The need for a retirement income does not depend on the size of your employer."
Paul Goodwin, director of workplace savings at Aviva, said he felt the original target date was achievable but that 'we acknowledge that in today's difficult financial climate a short delay may provide some employers with more flexibility to plan their auto-enrolment process'.
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