More than a third of small and medium sized firms in the district could face a £50,000 fine this year for not offering pensions.

New research by the Prudential suggests that the majority of the country's smaller firms, some 63 per cent, are still unaware that stakeholder pensions will be available to staff from April.

The findings also revealed that around 31 per cent of SMEs (small to medium sized enterprises) were not offering their staff access to a pension scheme.

Under the stakeholder initiative this could lead to hefty fines of up to £50,000.

Sandy Needham, Chief Executive of Bradford's Chamber of Commerce, said: "Pensions legislation is notoriously difficult to get to grips with. Companies these days need to offer a range of benefits as part of employees' terms and conditions, so we think most would take pensions into account.

"Stakeholder pensions may be used where a company neither has a pension scheme nor contributes to an employee's annual personal pension fund, but they're not suitable for every employee.

"We would advise firms to familiarise themselves with the legislation."

The Prudential survey, carried out on the directors of 500 SMEs, found one-in-three had no understanding of the new legislation, with the technology, food and drink, and service industry sectors among the worst prepared.

The stakeholders scheme is intended to help Britain's three million employees who earn between £10,000 and £20,000 a year, but do not have a pension.

Under the new regulations employers with five or more members of staff will have to provide access to an optional pension scheme by October.