Personal accounts will lead to ‘dramatic’ increase in scheme workload

The financial adviser said companies would be obliged to start managing the auto-enrolment process on a regular basis whether they qualified for exemption or not.

Origen head of benefits strategy Steve Herbert said: "That’s a huge extra jump for employers.

"They’re going to have to change their communications materials and possibly their contracts of employment. And if they don’t exempt and end up with a company scheme plus personal accounts, they’ll end up with two active schemes and twice the work."

He added that a principal problem will be getting scheme membership up to the right levels.

"If you consider that most schemes have 40pc to 75pc membership, they’re suddenly going to have an increased take up and that’s going to cost a huge amount of money."

However Mercer principal Steve Charlton said the obligations may not be too onerous for firms already managing a range of schemes.

He said: ""Auto-enrolment could simply require an additional field on an IT system.

"The real burden comes further down the line. If an employee does choose to opt out, the employer will be compelled at the three-year point to re-enrol them, by which point systems may have completely changed."