Auto enrollment pension legislation is set to become the hot topic amongst business owner for the foreseeable future. It seems like a mighty upheaval for businesses – especially those of a smaller scale – with up to 10 million new people expected enrol onto a pension scheme.

Businesses primary concerns may be financial. If they are to pay extended pension contributions they may have to budget accordingly which could have the adverse effect of making workers lives even harder. This shouldn’t be the case as contributions from the offset are minimal indeed, gradually rising from 1% in 2012 to 3% in 2017. The burden here lies more heavily on the worker: In 2012 the total contribution needed is 2%, 1% from the employer and 1% from the employee; in 2016 the total contribution needs to be 5%, 2% from the employer and 3% from the employee; in 2017 the minimum contribution will rise to 8%, 3% from the employer and 5% from the employee.

With those figures in mind we can see that the new legislation can be as burdensome on the employer as they wish it to be without too much financial pain if the employer can’t afford big contributions. If a business wants to put a more attractive scheme in place, that is their prerogative. They can seek out high contribution occupational or stakeholder schemes as a means of attracting the best staff.