Employers increase efforts to fill pensions gap as National Insurance levels rise

Payments into pension plans have more than doubled in the past four years and employers’ National Insurance contributions are now 9.7% of gross domestic product, the report showed.

Bank of England governor Mervyn King said the bank “remains ready to take whatever action might be necessary in the future” and warned that there was a 50% chance inflation would rise above 3% in the next six months.

The increasing pressure from pension costs has meant businesses have less money to spend on salaries, the report said.