By Daniel Hunter

The CBI have responded to government proposals to increase the Pension Protection Fund (PPF) compensation cap by 3% for every full year of service above 20 years.

Neil Carberry, CBI Director for Employment and Skills, said:

"This will come as a bitter blow to firms struggling to drive economic growth and fund their own pension schemes.

"The fund is paid for by business, not the Government. At a cost of over £600m a year, it is already more than double the original plan, and the levy is likely to rise again this year. An even greater levy will hold back business investment and growth.

"Businesses support the PPF, and would have expected more engagement before this announcement was made."