The Federation of Small Businesses is calling for a planned review of automatic enrolment to be delayed beyond next year to better account for the impact of its roll-out.
Auto-enrolment is being expanded to small businesses this year, with a long-scheduled review of the process set for 2017.
However, speaking to the Work and Pensions committee this morning, FSB policy director Mike Cherry has called for the process to be delayed in light of new dates for increases to contributions.
In November last year, the Government announced a planned increase in minimum contributions from 2 per cent to 5 per cent due in October 2017 will be postponed to April 2018, and a subsequent rise from 5 per cent to 8 per cent due in October 2018 will be delayed until April 2019.
Cherry said: “Given that things have been pushed back a little, our concern is that review may not harness some of the issues that will come up when the vast majority of small businesses have to face auto-enrolment.
“And we would advocate that is delayed until you actually have enough evidence to understand what any subsequent issues may be over the next 12 to 18 months.”
Cherry’s comments come a month after the FSB warned half of small firms would struggle on auto-enrolment.
Cherry also described the situation facing employers as “a very difficult arena”.
He said: “The vast rump of businesses in the UK are now facing auto-enrolment. There are other challenges facing them around the national living wage and changes to dividends coming through in April.
“It is all coming at the same time and that is not helpful. This was one of our real concerns – that if everything did clash…at the same time auto-enrolment came in, it would prove a massive challenge to the majority of small businesses.”