{"id":342119,"date":"2025-08-13T21:06:25","date_gmt":"2025-08-13T21:06:25","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/342119\/"},"modified":"2025-08-13T21:06:25","modified_gmt":"2025-08-13T21:06:25","slug":"business-owner-fears-pension-contribution-hikes","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/342119\/","title":{"rendered":"Business owner fears pension contribution hikes"},"content":{"rendered":"

\n\t\t\t\t\tThere is growing pressure to review current rules around employers’ pension contributions, which some firms say would have a significant effect\t\t\t\t\t <\/p>\n

Some small business owners<\/a> say they may be forced to reduce staff benefits, or shut down altogether, if the Government increases mandatory employer pension contributions in future.<\/p>\n

Although pensions minister Torsten Bell has said that no changes will be introduced during this parliament, the revival of the Pensions Commission<\/a> last month has signalled that long-term reform is back on the agenda.<\/p>\n

Bell said the renewed focus aims to \u201ccomplete the job\u201d of tackling the risk of poverty in retirement.<\/p>\n

Currently, employees and employers must contribute a combined minimum of 8 per cent of a worker\u2019s salary into a pension \u2013 5 per cent from the employee and 3 per cent from the employer. <\/p>\n

But with a growing number of people not saving enough for retirement<\/a>, policymakers are under pressure to review these rules.<\/p>\n

Without reform, retirees in 2050 could see private pension income fall by 8 per cent compared with today, Government data show.<\/p>\n

Groups most at risk of under-saving include the self-employed, lower earners, and people from ethnic minority backgrounds.<\/p>\n

However, many business owners argue that any hike in employer contributions would hit them at a time when they are already struggling with the cumulative cost of national insurance (NI) increases, inflation, and rises to the minimum wage.<\/p>\n

\u2018We\u2019re already holding on by a thread\u2019\"\"Business owner Amy Lewis is already struggling, she says<\/p>\n

Amy Lewis, the founder of Mooeys, a group of specialist beauty salons, said she has already had to make two redundancies this year due to higher national insurance bills.<\/p>\n

She has three of her own salons and four franchises and said: \u201cSmall and medium businesses have been hit so hard over the last five years and are holding on by a thread, especially in the hair and beauty sector.<\/p>\n

\u201cWe appreciate that living costs are rising and so should minimum wage, but there\u2019s only so much within our margins to accommodate this before it\u2019s just not worth it.<\/p>\n

\u201cForcing us to increase pension contributions is just going to force more businesses like mine into a self-employment model rather than fully employed as we are now.<\/p>\n

\u201cThe more costs that are forced on to us as small and medium businesses, the harder it is for us to survive.\u201d<\/p>\n

Lewis, 44, from Bedfordshire, said the combination of the pandemic, rising business taxes and inflation has left her with no space to plan ahead.<\/p>\n

She added: \u201cWe\u2019re still paying off Covid loans, and every year brings a new cost that we\u2019re expected to absorb without question. There are only so many price increases we can pass on to clients before it stops being viable.\u201d<\/p>\n

For others, a rise in contribution rates could delay efforts to improve benefits for staff.<\/p>\n

\u2018We need to be supporting businesses to grow\u2019\"\"Laura Dolphin doesn\u2019t believe that upping pension contributions for employers is a necessary step<\/p>\n

Laura Dolphin runs a small social enterprise \u2013 Dolphin Outsourcing Ltd \u2013 employing five people and several freelancers.<\/p>\n

The 36-year-old said: \u201cWe were very interested in providing health support, due to the challenges many of us are facing with dental costs and access to quick and quality healthcare because of the challenges the NHS is facing. This won\u2019t be an option if pension contributions are upped.\u201d<\/p>\n

Dolphin, who is from London but now lives in Northamptonshire, doesn\u2019t believe this is a necessary step, adding: \u201cWe need to be supporting businesses to continue to operate, to give them room and support to grow.\u201d<\/p>\n

While she acknowledged the policy may not have an immediate financial impact, she is concerned about the long-term implications for growth. <\/p>\n

She explained: \u201cBig changes inevitably mean an increase in costs. <\/p>\n

\u201cWe have a small, employed team and we also work with a freelance team, so an increase in pension contributions is marginal for us currently but could have an impact in the future as we grow.\u201d<\/p>\n

\u2018I\u2019ve already had to move my business offshore\u2019\"\"Zoe Price has been forced to make changes she didn\u2019t expect<\/p>\n

Zoe Price, 48, who runs a CV-writing business, Resume Pilots, from Wiltshire, said the business has already been forced to shift to overseas staffing to manage costs.<\/p>\n

She said: \u201cIt simply would not be sustainable for my business and would have a detrimental effect on our cash flow.<\/p>\n

\u201cSmall businesses need low costs, favourable tax regimes and certainty in order to make the long-term decisions around staffing levels.<\/p>\n

\u201cWithout this, the small and medium-sized business market will become risk-averse, which further contributes to a stagnating economy.\u201d<\/p>\n

A Government spokesperson said: \u201cWe have explicitly ruled out any increases to minimum automatic enrolment contribution rates for the entirety of this Parliament.<\/p>\n

\u201cThe Pensions Commission will consider who is missing out on the chance to save for a decent living in retirement, as well as the balance between employees and employers in terms of pension contributions, with the final report due in 2027.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"There is growing pressure to review current rules around employers’ pension contributions, which some firms say would have…\n","protected":false},"author":2,"featured_media":342120,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3093],"tags":[51,474,8414,617,2499,2978,16,15],"class_list":{"0":"post-342119","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-labour","11":"tag-pensions","12":"tag-personal-finance","13":"tag-small-business","14":"tag-uk","15":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/115023497525184085","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/342119","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=342119"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/342119\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/342120"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=342119"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=342119"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=342119"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}