Warning over impact of pension rules on SMEs

THE government’s drive to get every business in the country to pay a form of contribution to pensions will be a “nightmare” for small firms, accountancy firm RSM Tenon has claimed.

The firm’s Business Barometer survey questioned more than 390 entrepreneurs and it showed that 44% do not have pension schemes for their employees.

By 2014, all of these businesses will have to set up, administer and contribute to pension schemes for all their employees increasing the costs significantly.

Businesses in the North West will have the most work to do as 52% of them do not pay anything towards pensions. The least affected area will be the Midlands with 68% of businesses already offering contributions towards pensions.

Firms run by women will have slightly more to do than businesses run by men as 47% of female business owners do not pay pension contributions compared to 43% of men.

Chris Bardin, director of financial services at RSM Tenon in the North West, said: “We support compulsory pension saving, given the strain on the state benefit system. But, at a time when so many businesses are on the brink of collapse, an increased cost burden for 44% of UK businesses could just push them over the edge.”