David Cameron has set out plans to contribute an extra £95m to help contractors and SMEs.
The money will come from the Regional Growth Fund and will be filtered out through RBS NatWest and HSBC, leading to the potential unlocking of £500m.
RBS, NatWest and HSBC have agreed to facilitate the distribution of the £95m, £70m of it via RBS and NatWest and £25m via HSBC. The banks will not profit financially from the administration of these schemes.
The government is also considering making small businesses exempt from pension auto-enrolment which has alarmed the National Association of Pension Funds (NAPF).
The NAPF has urged the government to stick with the existing reforms and timetable, which could help up to 9 million people save for their old age. Currently 14 million people look to be set for an inadequate income in retirement.
NAPF chief executive, Joanne Segars, said:
“Whilst carving out or pushing back the start date for small employers might have short-term political temptations in the current economic climate, the longer term effects would be highly damaging to the nation’s retirement prospects.
“When it comes to pensions, the government must stick to plan A. These reforms are a once-in-a-lifetime opportunity to help tackle the UK’s pensions saving crisis. These reforms have been a decade in the making and now is the time to press play, not pause.”
