Small businesses reacted with anger to the announcement of a vast national pension scheme forcing firms with as little as two employees to contribute towards staff pensions, as early as 2012..
The coalition was applauded for pressing ahead with Labour plans to ensure that people start to build up savings for their old age. But there was outrage that small firms were not exempted.
The Federation of Small Businesses said the scheme would prove an ‘administrative headache’ for firms as they struggle to rebuild themselves following the recession. It said it was ‘extremely disappointed’ that the Government was not exempting firms with five employees or fewer.
Firms will at first have to pay one per cent of a staff member’s salary, rising to three per cent by October 2017.
It is imperative for small to medium size enterprises to plan ahead NOW and ensure they have provided for cash flow to meet these costs.