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Barnett Waddingham comments on delays to auto-enrolment

Following today’s announcement that there will be changes to the auto-enrolment timetable for firms with fewer than 50 employees, Malcolm McLean, a consultant at the pensions actuaries and consultants Barnett Waddingham, said:

“From a pensions and long term savings point of view this is disappointing news. There was always the risk that the Government would lack the courage of its convictions and back away when push came to shove.

“But coming at this very late stage when the main legislation giving effect to auto-enrolment has been passed and when both DWP Ministers and their opposition counterparts have seemingly been at pains to re-assure us  that the plans were firm and would go ahead – notwithstanding the economic situation – this comes as a bit of a surprise.

“The concern to help and sustain small to medium size employers through the current economic downturn is, of course, understood but that could be done in other ways – perhaps by offering greater fiscal support to them via the tax system to offset in part at least the extra cost of the pension contributions they were having to make.

“It is a fact that many of the employees of these sorts of companies are the very ones who are most in need and stand to gain most from having an employer backed pension scheme. Why should they miss out when others who happen to work for slightly larger concerns stand to gain?

“The DWP’s statement suggests that for small employers (up to 50 employees) they are delaying the implementation of auto-enrolment not scrapping it completely.  But is that so and can we be sure that if the economic situation is no better by 2015 that the timetable won’t slip again.  This is all most unsatisfactory.”

For more information please contact Malcolm McLean or Steph Gold