Whether you are an employer or employee workplace pensions will be something that you will come across as you move through your working life. At HSP Financial Planning we are able to assist you through each stage of planning as an employer from understanding your staging dates and requirements, setting up schemes, writing to your employees and completing your declaration of compliance. The rules around pensions mean that every employer now has to offer their employees a workplace pension scheme – this process is known as Automatic Enrolment. But where do you start?
Under the Pensions Act 2008, every employer in the UK must assess their workforce and enrol some employees into a pension scheme and contribute towards it. These rules apply to all employers who have at least one member of staff.
It doesn’t just apply to businesses should you employ someone directly to work for you – like a cleaner or nanny, for example – you are an employer and will need to ensure that any eligible employees are enrolled into a workplace pension. Generally, if you deduct income tax and National Insurance contributions from the wages of the person you employ, then you are usually their employer.
Millions of workers are being automatically enrolled into a workplace pension by their employer. Once you are enrolled, not only will you pay in to it but so will your employer and you may also get tax relief from the government.
This is to make it easier for you to start saving. If you are eligible, the earlier you start saving the more you are likely to have when you reach retirement.
Saving into a workplace pension is simple, you do not normally have to do anything as you will be automatically enrolled by your employer.
You do have the choice to opt out if you wish, but that means losing out on employer and government contributions which will boost your pension – and if you stay in, you will have your own pension that you receive when you retire.
Your employer will need to enrol you into a workplace pension scheme if you:
- Are not already in one
- Are aged between 22 and State Pension age
- Earn more than £10,000 a year
- Work in the UK
If you have any queries about your current or previous workplace pension scheme we have advisers who specialise in this area.