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Almost half of all SMEs would suffer a drop in profits if compulsory pension schemes are introduced, according to research by Bibby Financial Services.
At the moment, 64% of SMEs currently lack a compulsory pension schemes, but if
proposals by Lord Turner to introduce a National Pension Savings Scheme (NPSS) are accepted by the government, all companies would have to enrol their workforce, making a compulsory 3% contribution to each individual’s fund.
The study found 31% of business owners would cut investment in company growth should compulsory contributions be introduced, while 32% feared the rules would hinder their expansion plans.
Two fifths said pay review policies would have to be reviewed, a third claimed that recruitment drives would suffer and 22% believed staff benefits would suffer.
David Robertson, of Bibby Financial Services, commented: “With Lord Turner himself admitting that the NPSS would cause operating costs to rise by 1% for SMEs
compared to 0.4% for larger organisations, the government clearly needs to
reconsider its plans and consider the impact the 3% contribution will have on
the UK’s small business community
“Business owners and managers make a significant contribution to the economy and
any demise in their prosperity could have a serious knock-on effect across a
wide range of industry.”
Source:
RedAlert
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