smallbusiness.co.uk: Helping your business think big

The Pensions Regulator has assured small businesses that they will take company finances into account when they make recovery plans for failing pension schemes.

Although some small businesses are struggling to bridge the pension gap and are in deficit, the body claims it will not demand rectification fees that are unrealistic.

Explaining its position, Amy Balchin at the Pensions Regulator says: 'We take affordability very seriously. There may be more of an affordability issue [for small businesses].

'The scheme specific funding regime is very flexible so that different companies can set their own level of funding as long as we think it is appropriate.'

She adds: 'We will be looking at the circumstances of the employer; whether it is a stronger or weaker employer and how big the deficit is when they are coming up with that plan.'

Figures from the National Association of Pension Funds claim that 80 per cent of small pension schemes were funded to the government recommended level, the figure for larger schemes was 96 per cent.