Personal Accounts will cost UK businesses almost £3bn each year after 2012, according to consultancy firm, Mercer.
The firm warns that employers will struggle to meet the costs involved in the scheme if the economic environment has not significantly improved.
Companies with a low uptake of their own pension offering are likely to suffer the most, Mercer says.
The firm is encouraging employers to plan ahead for ways to reduce the costs of auto-enrolment and to free-up funds elsewhere to pay for increased contributions.
"The introduction of auto-enrolment will have a dramatic impact on company remuneration budgets, especially for those companies with a low current uptake of membership in their pension schemes," says Steve Charlton, principal at Mercer.
"Planning ahead by identifying the likely cost and considering the options available for mitigating this or spreading it over a longer period will help soften the impact on company balance sheets."
Mercer's website has a range of information on the issues likely to affect employers after 2012, along with a calculator to estimate the potential costs involved in auto-enrolling all staff.
Contact: John Bakie, Tel: 020 7484 9805, e-mail: [email protected]IFAonline
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