The National Association of Pension Funds has warned policymakers any further delay to automatic enrolment would be “a false economy” because it would increase future Government costs.
In October, Money Marketing revealed the Government was looking at extending the auto-enrolment phasing-in period for small firms due to concerns about their growth prospects.
In January this year, pensions minister Steve Webb confirmed that employers with fewer than 50 employees will have their staging date pushed back until after the General Election in May 2015.
In his response to the Department for Work and Pension’s consultation on the revised timetable, NAPF senior policy adviser Richard Wilson says: “We are concerned about the impact of endless changes and delays to the full introduction of automatic enrolment.
“Delaying both staging and phasing dates benefits the Treasury because cutting pension saving cuts the amount of tax relief ordinary workers receive.
“However, we believe it is false economy to keep delaying auto-enrolment to temporarily increase tax revenues, as this only adds to future Government costs when people retire without adequate pensions.”
Evolve Financial Planning director Jason Witcombe says: “The Government now needs to stand fully behind auto-enrolment and back it to the hilt. Any further tampering will damage confidence among employers, employees and IFAs.”