Auto Pension Enrollment
Auto Enrollment in Pension Schemes workplace pensions changed in 2008 and they introduced Auto Enrollment. Employers have been made responsible for the provision of a workplace pension scheme, our experts are on hand to help you through this process.
Our experts fully understand all of the regulations and rules for payroll laid down by HMRC, and can ensure that you are compliant with all of them and so not face any penalties or fees.
Pension Schemes changed in 2008 and they began to phase in Auto - Enrollment into work place pensions which as of February 1st 2018 they are fully in place across the whole of the UK and in all sectors.
Previously, employees may have not received the benefits of a pension as their employees would not offer this or they were unaware that they had to apply to joining their companies pension scheme.
With the introduction of Automatic Enrollment in pension schemes this has now changed. It has been phased in and now all companies, as of 1st February 2018 should be providing this.
The majority of workers in the UK are now automatically enrolled in a pension scheme by their employer. Within one month of being automatically enrolled the worker may choose to opt out of the pension scheme. However, all they have to do to stay in the pension scheme, is do nothing. Contributions will be deducted from their wages and put aside into their pension pot for as long as they are receiving wages or until they make the decision to take their money out.
Automatic Enrollment: How Much Will It Cost?
The government has set out a minimum amount for pensions contributions from both employers and employees.
However many employers offer their employees higher contributions should they choose to accept it and contribute a little more themselves. On top of this the government provides some tax relief on these pension payments.
These minimum contributions to your pension pots are based on what they call your qualifying earnings. Your qualifying earnings are worked out on your earning before deductions, such as national insurance, income tax or student loans. These earning no only include your hourly rate or salary, but any bonuses, commission and so on.
If it is decided to only pay the minimum amount towards your pension scheme, it is worked out as a percentage which is shown in below.
Automatic Enrolment In The Automatic Pensions Scheme
As an employee if your earnings are below a certain threshold you may have to as to be enrolled in the pension scheme as enrollment will not be automatic.
As an employer you will not have to pay contributions for everyone if they earn under a certain amount.