The Federation of Small Businesses (FSB) has reminded the secretary of state for pensions, John Hutton, that proposals for compulsory three per cent pensions are unsustainable for small firms.

Mr Hutton addressed the FSB National Annual Conference in Manchester last week.

The FSB says that smaller firms would have to set such a scheme up, which it believes would make many businesses unviable. It said that larger businesses already had existing schemes in place.

Mike Cherry, FSB national pensions spokesman, said he was "grateful" that the pensions secretary recognised the needs of small businesses.

"Small firms represent the engine room of the UK economy. It is essential to set our members free to grow and boost the nation's coffers. Burdening them with an extra cost is not practical nor is it in the nation's interests," he added.

Mr Cherry also said that making smaller firms contribute to pensions would negate the government's aim to support smaller firms.





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