Personal Accounts could lead to 200,000 job losses - hitting small firms especially hard - according to the University of Warwick's Institute for Employment Research.

Personal Accounts, also known as the National Pensions Savings Scheme, due to come into effect in 2012 will increase the labour costs by 0.6% for some firms and 1.1% for small firms the university's report reveals. And when you consider the salary levels and administration costs for firms having to implement Personal Accounts, the figure could be as much as 2%

According to the report, employers are considering passing the costs onto staff to avoid business failures and redundancies.

Author of the report Bernard Casey said: "Improving pensions is a laudable objective. However, it is unwise to think that better pensions can be had without a cost. Policymakers should be explicit about this cost. They should also consider whether arrangements other than Personal Accounts might do a better job."