The Government is considering the possibility of delaying the full implementation of workplace pensions, amid concerns that smaller employers will struggle to introduce it alongside the mandatory increases in the living wage.

The delay could be called, according to a report in the Daily Telegraph, in order to give more time for employers to get the arrangements in place. Under the current rules, every employer – even those employing just one member of staff – will need to have a workplace pension in place, within three years. But the newspaper says a National Audit Office report has revealed there is an “emergency pause” plan ready to go, if they think that the auto enrolment process looks as though it will be too tough for small firms.

The delay would allow small employers to cope with other changes such as the increase in the minimum wage. There is also a concern that, with up to five million people needing to be enrolled, then computer hackers may target overworked IT systems, and steal personal data.

Many UK workers will need to be automatically enrolled in a pension scheme, by their employer, in a Government bid to improve savings and promote a culture of investing in a pension plan. It will be compulsory for employers to automatically enrol appropriate PAYE staff into a pension scheme, which the employer will also be responsible for paying into.