Small businesses 'in the dark' over NPSS

27 July 2006
According to the Forum of Private Business (FPB), small companies and firms will struggle to come to terms with the government's proposed changes to the pension scheme but are not being kept up to speed on the alterations.

One such possible introduction is the National Pensions Saving Scheme (NPSS), which requires employers to contribute three per cent of workers' pay into a pension scheme.

Employees will be automatically enrolled but will have the choice of opting out if they so wish.

The new scheme is expected to increase employee enrolment in accounts for pension provision but it will also end up costing small to medium-sized businesses (SMEs) money – something many employers are not fully aware of.

"The government should make the situation clearer for smaller firms," said Matt Hardman, a spokesperson for the FPB. "We have to look specifically at the area of employment."

The FPB described the NPSS as "another employment tax" and called for means testing to be introduced in order to balance out the impact it will have on firms that are involved.

"Small businesses are in the dark about this so far," he added. "They haven't been told who it is going to affect or how it is going to affect them and that is a recipe for disaster."

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