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&#39Stakeholder bill to hit £163;1.6bn&#39

Stakeholder pensions could cost British business up to £163;1.6bn a year, according to research by Torquil Clark.

Government estimates put maximum annual maintenance costs at £163;410m.

The Wolverhampton IFA surveyed 22 providers on stakeholder issues and found that they believe the Government has seriously under-estimated the cost of the new regime to businesses.

Torquil Clark says Dep artment of Trade and Ind ustry figures suggest that 16.4 million people are employed by companies which have five or more employees, making them eligible for stakeholder.

The report shows product providers believe the maximum ongoing cost to businesses could be as high as £163;1.6bn.

The research suggests that if every target com pany were to establish a stakeholder scheme for all its elig ible employees, the total set-up costs would be between £163;15 and £163;100 per emp loyee. The Government put these costs at between £163;10 and £163;25 per employee.

Torquil Clark says these estimates are likely to rise when the cost of advice has been added and the fact that employees will want to organise their pensions during work hours is taken into account.

Torquil Clark pensions development manager Tom McPhail says: “Insurance and pension companies believe the costs will be higher than assumed by the Government.

“A potential £163;1.6bn per year could be shared among all companies with five or more employees.

“This represent a major shift of costs on to British industry to collect pension contributions rather than the state and National Ins-ur ance collection systems.”

A CBI spokesman says: “There has been a general increase in employment regulation which has increased the administrative burden. It is time to give busi nesses breathing space.”

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