Employers will struggle to cope with the additional costs of Lord Turner’s compulsory pension contributions, according to British Chambers of Commerce (BCC).
The Pension’s Commission has proposed raising the state pension age from 65 to 68 by 2050, automatic enrolment for employees and the creation of a National Pension Savings Scheme (NPSS).
At the launch of his final report yesterday, Lord Turner acknowledged that taxes might have to rise to compensate for higher pension costs and said that most pension experts believed the commission should have recommended a “more radical” form of means-testing.
But BCC director-general, David Frost, told delegates at the BCC annual conference yesterday that Turner’s proposals could be the “tipping point” for small businesses and that they could cause redundancies.
“We welcome the fact that Lord Turner has recognised our legitimate concerns by suggesting some form of subsidy,” he said.
“However, this will not help those employers that simply cannot afford to pay into schemes. Small firms will be particularly badly hit, and businesses continue to tell us that they would have no option but to reduce salaries and lay off staff.”
Professional services firm Deloitte has suggested that the compulsory contributions could cost employers an extra £2.3bn per year.