Automatic Enrolment Pensions
The Government wants to encourage all workers to save for their retirement, in as easy a way as possible. Therefore, it has introduced a new law designed to help people save more.
From 2012, all employers, starting with the largest employers first, must enrol their eligible workers into a workplace pension, if they are not already in one, if they:
- Are at least 22 years old;
- Have not reached state pension age;
- Earn more than a minimum amount a year (currently £9,440); and
- Work, or ordinarily work, in the UK (under their contract).
The employer must make all the arrangements and the individual need do nothing to be put into the scheme.Employers also have to pay a minimum contribution into the pension scheme for their eligible workers. The Government will also pay into it, in the form of tax relief.
Employees will not be automatically enrolled into a pension scheme if:
- They are not eligible; or
- They are already in a workplace pension scheme that meets the Government’s standards.
If employees are not eligible, they might have the right to opt into their employer’s workplace pension scheme, and their employer might pay into it too.
For more information on this and how to make sure your company complies with this law get in touch now, this will help you avoid any unnecessary penalties.
The value of your investment can go down as well as up and the value of the pension fund may be worth less than has been invested.