Small firms across Shropshire are struggling to keep up with workplace pension contributions, a local accountant has warned.

Helen Thomas, of Dyke Yaxley Chartered Accountants, in Shrewsbury, said figures showed that with people living longer, small companies were finding it increasingly difficult to meet the necessary payments.

"According to the latest research, most defined contribution pension schemes run by smaller firms bring in a total of less than eight per cent of earnings when employer and employee contributions are combined.

"This rate is unlikely to give people sufficient retirement income, and what's even more worrying, around two thirds of smaller firms offer no pension scheme at all.

"And almost all the firms who don't offer a scheme (96 per cent) said the reason was due to the expense."

Helen said this would have to change though, as under government pension reforms, all firms will be required to enrol their employees in a "qualifying workplace pension scheme" between 2014 and 2016.

"By October 2017, contributions must equal eight per cent of an employee's earnings, with a minimum of three per cent coming from the employer, four per cent from the employee, and one per cent from the government in the form of tax relief.

"But so far, in a survey by the Association of Consulting Actuaries, only 21 per cent of smaller firms questioned said they had started to assess the financial impact of the new rules.

"In reality, contributions into most schemes need to double on average to at least 15 per cent of earnings if people want to achieve an adequate retirement income.

"Employees need to be encouraged to save more, and employers too will need new incentives to motivate them into boosting pension contributions and more freedom in terms of how pensions are designed.

"Smaller firms will need much greater help if they are to fulfil their important role in kick-starting higher and more realistic levels of pension savings."