ACS: Government Must Minimise Pensions Costs for Small Shops
13 Dec 2006
The Association of Convenience Stores (ACS), the campaigning voice of the local shop, has responded to the Government’s white paper on pensions by calling for more to be done to reduce the cost on small businesses before it is too late.
The main proposals of the White Paper are:
• A system of personal accounts into which employees would be automatically enrolled, with the option of an opt-out
• Employee contributions of 4% and employer contributions of 3%, to be phased in over three years, and 1% tax relief
• Employers would not be required to give advice on which provider an employee should choose
• A central clearing house as one point of contact for employers to pay contributions to
• A voluntary opt-in for the self-employed, with no minimum contribution
ACS Chief Executive, James Lowman said, “ACS has submitted detailed evidence to the Government on the impact that compulsory employer contributions to pensions will have on the local shop sector. This direct cost impact should not be underestimated; local shops operate in an intensively competitive market place where any increase in costs affects the profitability of the business. We have estimated that these costs alone will add more than 1% to employment costs.
“This is only the directly quantifiable cost burden that this will place on local shops. The administration and compliance costs are potentially even higher, and while we welcome a phasing in of employer contributions and not tasking employers to give advice on which provider to choose the Government has to do far more to minimise the cost burden of these proposals for small businesses.”
ACS is also reminding the Government to consider the affect that these proposals will have on the self-employed, continues Lowman, “While small businesses are required to fund measures to secure the retirement of their employees, the future security of the growing self employed workforce is being treated as a side-issue. Of the 3 million self-employed in the UK 2 million are not saving, and these proposals offer little for their pension provision. If this issue is not taken seriously, the Government will be creating a significant disincentive to entrepreneurs and job creation."
Contact:
Shane Brennan Public Affairs and Communications Manager
01252 515001 / 07921 372978
Rachel Lawson Communications Co-ordinator
01252 515001
Notes:
1) ACS is the convenience store champion, helping local shops thrive through lobbying, insight, information and commercial service.
The main proposals of the White Paper are:
• A system of personal accounts into which employees would be automatically enrolled, with the option of an opt-out
• Employee contributions of 4% and employer contributions of 3%, to be phased in over three years, and 1% tax relief
• Employers would not be required to give advice on which provider an employee should choose
• A central clearing house as one point of contact for employers to pay contributions to
• A voluntary opt-in for the self-employed, with no minimum contribution
ACS Chief Executive, James Lowman said, “ACS has submitted detailed evidence to the Government on the impact that compulsory employer contributions to pensions will have on the local shop sector. This direct cost impact should not be underestimated; local shops operate in an intensively competitive market place where any increase in costs affects the profitability of the business. We have estimated that these costs alone will add more than 1% to employment costs.
“This is only the directly quantifiable cost burden that this will place on local shops. The administration and compliance costs are potentially even higher, and while we welcome a phasing in of employer contributions and not tasking employers to give advice on which provider to choose the Government has to do far more to minimise the cost burden of these proposals for small businesses.”
ACS is also reminding the Government to consider the affect that these proposals will have on the self-employed, continues Lowman, “While small businesses are required to fund measures to secure the retirement of their employees, the future security of the growing self employed workforce is being treated as a side-issue. Of the 3 million self-employed in the UK 2 million are not saving, and these proposals offer little for their pension provision. If this issue is not taken seriously, the Government will be creating a significant disincentive to entrepreneurs and job creation."
Contact:
Shane Brennan Public Affairs and Communications Manager
01252 515001 / 07921 372978
Rachel Lawson Communications Co-ordinator
01252 515001
Notes:
1) ACS is the convenience store champion, helping local shops thrive through lobbying, insight, information and commercial service.