The government has announced a change to employment law that it claims will give small businesses more time to prepare for the auto-enrolment pension scheme.

Pensions minister Steve Webb revealed the switch to the new system is going to occur next autumn and called for society to be built on savings, rather than debt.

He explained the change to employment law will enable millions of people to save money for their retirement and ensure fewer individuals are poor in their later years.

Mr Webb added the coalition understands the tough economic conditions small firms are operating under, which is why it has given them more time.

Aviva's director of workplace savings Paul Goodwin acknowledged the delay will have benefits for companies as they will be given the chance to prepare.

But Maggie Craig, director of life and savings at the Association of British Insurers, warned: "It will be very important that this is not allowed to slip and slip. We need to keep up the momentum to address the UK's savings crisis."