From 2012 employers will be required to enrol staff automatically into a qualifying pension scheme and business owners must contribute a minimum of 3% of the member’s salary phased in over a period.

Where the employer does not provide such a scheme, employees must be enrolled into the new National Employment Savings Trust (Nest), a simple low-cost pension scheme that is being introduced by the government.

The changes will begin to take effect in October 2012, with the largest employers joining first and the smallest joining by September 2016 and contributions from staff and employers will also be phased in.

This will be another cost for employers that may be alleviated by negotiation with staff over future pay increases.