FSB: SMEs to be hit hard by pension reform

Automatic enrolment into a pension scheme will cost small businesses £2,550, the Federation of Small Businesses warns.

From 2017, all firms and their staff will have to be fully enrolled into a pension scheme and business owners will have to pay a minimum of 3 per cent of an employee’s salary into a pension.

As a result, the average small business will pay at least an extra £2,550 per year in administration and pension costs.

Mike Cherry, FSB policy chairman, says: ‘It is vital that everyone is able to save for their future but the automatic enrolment scheme is going to cost the smallest businesses dear.’

The true administrative costs are unknown and could be ‘extortionate’, according to Cherry.

‘We are calling on the government to publish a proper impact assessment immediately to shed true light on just how much these changes will cost small businesses,’ he adds.

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