Your Local Guardian: Twitter follow me strip

Micro firms should be exempt from the new automatic enrolment pension scheme due to come into force in 2012, a Croydon business leader has said.

Jeremy Frost, chairman of the Croydon branch of the Federation of Small Businesses(FSB), said companies with 10 employees or fewer would be damaged by the new rules.

The FSB believes the proposed changes will be too complicated for small businesses to put in place, with research by the body suggesting seven out of 10 business owners do not feel confident choosing a pension for their staff.

The federation believes small firms do not have the expertise they need to choose a staff pension scheme due to their complexity.

Mr Frost said: “The FSB welcomes initiatives to help people save for their future in a pension but we are still concerned the new automatic enrolment pension scheme is going to be an administrative headache for small firms – particularly micro firms – and will cost them in time and money.

“We know that small firms do not feel confident in choosing a pension scheme because of its complicated nature.

“We are thoroughly disappointed that five years on from the original proposals, the pensions industry has yet to come up with an efficient system to cater for micro firms.

“The FSB is calling on the Government to make micro firms exempt from the automatic enrolment scheme and improve proposals for small firms.”

The body has said it is “extremely worried” the majority of small businesses and their employees are unaware the country’s pension scheme is due to change in two years, describing the Government change to a default pension scheme as a “ticking time-bomb”.