Experts call on govt to confirm pension reform go-ahead

The government must confirm if auto-enrolment is to be put on hold to prevent damage to businesses, following reports it could be delayed, industry figures say.

Reports in the Sunday Telegraph and Sunday Times claimed the introduction of  auto-enrolment could be stalled and the obligations on smaller firms could be scrapped as a result of a Cabinet Office report on cutting red tape.

The report, by private equity millionaire Adrian Beecroft, recommended drastic reductions in workers' rights and benefits in order to ease the buden on businesses.

Anthony Arter, senior partner at law firm Eversheds, said it is understandable the government is examining the timing of auto enrolment given the fragile state of the economy.

"However, it is vital that the government makes its intentions clear because companies are already spending considerable sums of money preparing for implementation," he added.

Richard Butcher, managing director of Pitmans Trustees said: "Uncertainty does employers, employees and the economy no favours.

"It will also do further damage to the cause of work place retirement saving."

Speaking before her promotion last week, former Labour pensions spokeswoman Rachel Reeves (pictured) said watering the legislation down would harm the objective of establishing a savings culture.

"When it are looking at any recommendations to scale back auto-enrolment, the government needs to remember 51% of people are not putting away enough for their retirement, and 20% are not saving at all," she said.

"With 1.4 million fewer people saving into personal pensions last year, and £2bn less put away, it is the wrong time for the government to be considering watering down auto-enrolment even further."

A government spokesperson said the government would not comment on the reports.