Fylde coast businesses' worries over new auto-enrolment plans

The move is contained in recommendations set to be published by the Department for Work and Pensions.

At present, automatic enrolment applies to workers who are aged between 22 and state pension age, and earning above £10,000 a year.

The rollout of auto enrolment started in 2012, with more than nine million people now having been placed into a workplace pension.

But businesses fear the new rules could put an extra burden on employers.

Alan Welsh, policy manager for the North and Western Lancashire Chamber of Commerce, said: “The government is right to encourage young people to start saving early in their working lives but there is also a danger that increasing employment costs, especially for smaller firms, will make it more difficult to create much needed jobs in the first place.

“Higher employment costs impact on the bottom line and reduce the resources available to invest in the business and its people.

“This move is another added cost to business which will hit smaller firms disproportionately harder than larger companies.”

Gary Lovatt, FSB Regional Chairman for Lancashire and Cumbria said: “We know from talking to businesses in Lancashire that their overheads have been rising for some time, and often it is difficult to absorb these costs within the business, which can mean that prices rise for the goods and services that they offer.

“Further increasing the costs of employing people inevitably makes employers think twice before taking on more staff.”

David Gauke, Secretary of State for Work and Pensions said: “We are committed to enabling more people to save while they are working, so that they can enjoy greater financial security when they retire.”

Mike Cherry, national chairman at the Federation of Small Businesses, said: “Auto enrolment has helped employees start saving for their retirement, but the self-employed have been left behind.”