the business ladder

The FSB (Federation of Small Businesses) has reacted to plans to automatically register employees to workplace pensions, warning that it will cost small companies at least £2,550 per annum.   

Being launched in 2012, these new proposals will call for all employees completing over three months employment to be immediately included in the workplace pension, as long as they earn over £7,475.

Employees will provide 4% of their earning, with employers giving 3%, and the government a further 1%.
Furthermore, workers have the option of opting out of the pension scheme if they so choose to. The government has resolved that all companies will participate, despite the FSB calling for small businesses to be exempt.

The government’s assertion that it will cost just £46 in administration costs per employee has been questioned by the FSB, who feel that the figure presented is a massive underestimation, and as such, has requested an assessment of the impact of such a measure to be produced.

The financial services company Hargreaves Lansdown have released an analysis of the decision by the government to administer a 5% pay cut across parliament, published in the Mirror. The cuts do not affect wider parliament, but mainly Cameron’s team, letting ministers build their pensions based around their previous, higher earnings.

A cost to the taxpayers of £200,000 to fund these government pensions has been approximated by Hargreaves Lansdown.

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