The National Association of Pension Funds has warned the Government not to exempt small businesses from its auto-enrolment reforms or extend their implementation deadline.
Last month, it emerged that the confidential Beecroft report commissioned by the Government recommended that auto-enrolment be delayed for small companies.
Currently, small employers will only be required to auto-enrol people into a pension from 2014 and pension contributions will be phased in gradually to limit the impact on employers.
The NAPF says that 14 million people are set to have an inadequate income in retirement and the Government’s reforms could help up to nine million people save.
NAPF chief executive Joanne Segars says: “While carving out or pushing back the start date for small employers might have short-term political temptations in the current economic climate, the longer term effects would be highly damaging to the nation’s retirement prospects.
“Small firms are essential to making these reforms work. Of the nine million expected to be enrolled, up to three and a half million are working for small businesses. Exempting them or delaying their start would put them at risk of a retirement spent in poverty.”