Pensions World

Pensions experts are disappointed at the government’s decision to delay auto-enrolment. Small businesses (50 employees and fewer) will now have an extra year to prepare for the new rules and the new pension contribution responsibilities. They will have to comply from 2015 rather than 2014.

Tom McPhail, head of pensions research, Hargreaves Lansdown, says: "The government is showing signs of panic; after 18 months of robust pension reform, they are now capitulating to the unions on public sector pensions and betraying small business employees in the private sector. The present pensions crisis will only get worse if the government is not prepared to take tough decisions in order to safeguard our long term retirement provision on a sustainable basis."

Joanne Segars, NAPF chief executive, is more pragmatic: "It is welcome that auto-enrolment is still starting in 2012 and it is also a relief that all employers will be covered one day, regardless of their size.

"But we are disappointed by the further delay for smaller firms. When it comes to pensions, the government should have stuck to Plan A. These reforms have been a decade in the making and now is the time to press play, not pause.

"Small businesses are absolutely critical to making these reforms work, because their staff are the least likely to have a workplace pension.

"This decision also risks creating competitiveness issues where small firms are competing with larger companies who are going ahead with auto-enrolment."

She added: "Businesses will quite rightly be wondering how much faith they can have in the system and whether more upheaval is in the pipeline.

"The government needs to restore some trust in these hugely important changes. The UK simply is not saving enough for its old age and we have to get these reforms right."

www.dwp.gov.uk