Fears pension changes could be ‘nail in the coffin’ for small companies

Increased pension contributions could be “final nail in the coffin” for small businesses, some have argued (Source: FT Adviser)

Chancellor Rachel Reeves is reportedly weighing a major overhaul of the pensions system, with an announcement expected in her upcoming Mansion House speech later this month.

According to the Financial Times, the reforms may include a review of how much employers and employees contribute to pensions—potentially resulting in higher employer contributions.

The minimum employer contribution has remained at 3% since 2019.

Mike Staton, director at Staton Mortgages, was sharply critical of the idea: “After burdening UK businesses with hikes to National Insurance and the minimum wage, raising pension contributions would be the final nail in the coffin for many small firms.”

Staton warned such a move could trigger job losses, price hikes, and business closures.

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