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Small firms will be given longer to comply with the new pension auto-enrolment rules because of the tough economic climate, the Government has announced.

Publishing a revised implementation timetable, the Pensions Minister, Steve Webb, revealed that the scheme will not be fully phased in until 2018 - two years later than originally planned.

It is hoped the delay will ease the burden on small businesses during what he described as ‘exceptionally tough economic times.’

Auto enrolment will commence in October 2012 and will be phased in on a staged basis, starting with larger employers.

While the staging dates for firms with 250 or more employees will remain unchanged, small businesses have now been given until April 2017 to implement the scheme.

Furthermore, new businesses which begin trading between April 2012 and September 2017 will have from between 1 May 2017 and 1 February 2018 to comply.

Under the amended timetable, employers with fewer than 30 qualifying workers will have implementation dates ranging from between 1 January 2016 and 1 April 2017, and those with 30 to 49 staff have from 1 August 2015 to 1 October 2015. Firms with 50 to 249 staff must implement the scheme between 1 April 2014 and 1 April 2015.

Clarifying the new timetable, the Pensions Minister, Steve Webb, said: ‘Automatic enrolment will begin on time this October, taking up to 10 million people into pension saving, many for the first time ever, and all employers will be part of it.

‘We have done all we can to ease any burden on business the reforms will bring and employers of all sizes now know the date they need to start enrolling their staff.’