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Directors call for auto-enrolment delay

The Institute of Directors is calling on the Government to postpone the introduction of automatic enrolment until 2014 due to concerns over high opt-outs and costs to businesses.

Policymakers are under growing pressure to push back the current timetable, which will see the UK’s largest employers offering staff a pension scheme from October, 2012.

All companies will be forced to enrol employees into a pension scheme by 2016.

IoD director general Simon Walker says: “This is the wrong time to be implementing pension auto-enrolment. The Bank of England’s downward revision last week of their growth forecasts for this year and next shows that companies and households are hard-pressed. Real incomes are being squeezed and employers are struggling to offer staff pay rises.

“It is not too late for a change course – if the Government defers auto-enrolment at next week’s autumn statement, it will have done so before most businesses have even considered the impact of the new rules. A few months ago when we asked, one in five of our members did not even know the legislation was coming into effect from next year.

“The IoD proposes that the Government delay the introduction of auto-enrolment by two years. This would give businesses time to strengthen their balance sheets while not undermining consumer spending when it’s at its weakest.”

Pensions minister Steve Webb has previously insisted the Government’s is committed to implementing auto-enrolment next year.

Last week, Labour Shadow pensions minister Gregg McClymont said the DWP is coming under pressure from the Treasury to provide an exemption from the reforms for small firms.

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