Companies of all sizes will be forced to contribute 3% of every employee’s salary to a national pensions savings scheme under the government’s pensions white paper.

The changes to the current pensions system represent the biggest shake-up of the state provision for 50 years and will see employees automatically enrolled in the saving scheme from 2012. The age at which people retire will also be raised, eventually to the age of 68 by 2044.

The move to force businesses to contribute has resulted in fierce criticism from the Forum of Private Business, which has long lobbied against the move.

“Business owners and their staff have been left high and dry again,” said the group’s chief executive Nick Gouldling. “The cost of this scheme will be passed on to the consumer, or even result in job losses. The government have given no thought to the cost for employers and the average earner will be left under whelmed by the value that this scheme brings them.

“The white paper shows that the government has not got the courage of its convictions,” he added. “They are intent to let employers foot the bill for the pensions black hole, but are hoping that small businesses won’t notice the impact if they drag their heals in introducing it.”

Employees will be able to opt out of the national pensions saving scheme but businesses will still be forced to contribute. “When the government should be doing all it can to encourage individuals to save for the future, it has given them an option to sit back and let their bosses save for them,” said Goulding.

The body also criticised the government’s pledge to consider a “longer phasing-in period for smaller businesses”. “This is a half-hearted attempt to appease those companies that will be hardest hit,” Goulding added. “Small firms are left with the knowledge they will be hit by an employment tax, but with the uncertainty of not knowing when it will come into force.”

Companies running their own pensions schemes will be exempt from contributing to the state system as long as the amount put in is the same as or greater than the 3% that would be put into under the new proposals.

The Confederation of British Industry has estimated that the scheme will cost UK companies £2.3bn every year.

"I believe it can lay the foundations for a lasting solution to the pensions challenge we face as a country," said pensions secretary John Hutton.