Sometimes it pays to take up a smaller space in the market.

Previously it has been suggested that many of the changes proposed within employment law might not affect smaller businesses less able to cope with their implementation. It has now been confirmed that plans to introduce auto-enrolment into a pension scheme will not have to be put in place by smaller firms until 2015. The announcement has seen differing views as to whether or not it is good news.


A smaller firm has been classified as one with 50 or fewer employees. The initiative is hoped to help change the direction of the economy from a spending one to a saving one. When an employee joins a company they shall automatically be enrolled into a pension scheme. In doing this the government hopes that less people will be left feeling worse off when they come to retire. Issues surrounding retirement continue to gather pace given the removal of the retirement age and the extended life expectancies of people in general.

The relaxation for smaller business is to help ensure that they have sufficient time to get everything necessary into place. Whilst it is recognised such a change might have difficult repercussions on a smaller business, the government do not want those employed by a smaller employer to miss out on this opportunity to save for their futures. Unfortunately, not everyone is happy with the extended time offered to smaller business to introduce the change. The TUC feel that it is a grave disappointment that those employed by smaller businesses have to wait longer before they have the opportunity to save.

TUC's general secretary Brendan Barber commented "It is further confirmation that this Government sees small-business staff as second-class workplace citizens, not deserving of the same rights as staff in bigger firms. The need for a retirement income does not depend on the size of your employer." There is further feeling that these pension reforms need to be put into action sooner rather than later. Having been widely debated for years already now is the time to get things moving. Those employed by smaller firms are already less likely to benefit from a work pension so this change is all the more important for them and for their futures as well as that of the economy at large looking after an ageing population.

The plan had originally been for the system to be introduced from 1 October 2012 subject to the employer's own plans and also the size of the business. Before now the deadline for smaller employers had been April 2014. A more detailed plan of the changes is to be released in January 2012.

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