Under White Paper proposals, employers will be forced to pay a minimum annual contribution of £840 per employee into the National Pensions Savings Scheme accounts. Under the personal account system, employees will pay a mandatory contribution of 4% on earnings between £5,000 and £33,000, with employers adding a further 3% on the same salary band. A further 1% will be added on in the form of tax relief from the Government. These contributions will be phased in from 2012, over a three-year period, at the rate of 1% per year.
Aon Consulting have claimed that this will cost employers £2.3 billion, the Pensions Regulator another £5.8 billion, and will add 2% to the UK's current wage bill.
Our view
Thanks for nothing! Forcing employers to pay a minimum wage that keeps increasing, forcing employers to give even more holidays (the proposal is to increase to 28 days) and to force employers to pay pension contributions on top of this of around 4%.
What does the government offer in return? 1% of tax payers money back. Utter garbage! Expect more employers to move overseas!