Why pension auto-enrolment is important for your business
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Why pension auto- enrolment is important for your business
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Transcript of Why pension auto-enrolment is important for your business
Why pension auto-enrolment is important for your business
What’s this about?If you didn’t know already, the UK is going through one of the biggest changes in retirement that it has seen for many years. And it is a change that will impact on every employer and employee across the country.
The change is pension auto-enrolment and it will affect your business if you employ more than one member of staff.
What is auto-enrolment?• A government initiative to help people save money for their
retirement, with both the employee and employer putting money into the pot.
• It is called automatic enrolment because it’s automatic for your staff – they don’t have to lift a finger to be enrolled into your pension scheme. However, it is your responsibility as a business owner to ensure your employees are enrolled.
• All employers will be legally required to enrol their eligible workforce by their elected staging date which is determined by number of staff and PAYE reference number.
Find out your staging date here: www.thepensionregulator.gov.uk
Who is eligible for automatic enrolment?
You will be required to enrol all employees who:• Are not already in a suitable workplace pension scheme.• Are at least 22 years old, but under state pension age.• Earn more than £10,000 per work.• Work in the UK.
Employees can opt out at any time after the first month but the contributions already made will remain in the pension pot for retirement rather than be refunded.
How much will my business contribute?Up until October 1st 2017 an employer’s minimum contribution will be set at 1% of an employee’s earnings. Following this, it will rise to 2% until September 30th 2018 and 3% from October 1st 2018 onwards.
The minimum contribution applies to anything earned over £5,824.
An employer can opt to contribute more but the total contribution from both the employer and employee must be a minimum of 8% from October 1st 2018.
To find out more about this topic, why not read the whole article by following the link below:
Why pension auto-enrolment is important for your business
What’s your next step?
