Auto-enrolment has been rolling out to employers across the UK since 2012, with the aim of ensuring more people have a pension in place when they finish working.
Auto-enrolment duties started with the largest employers and have since moved through to smaller and medium-sized businesses.
Find out more about the latest changes to auto-enrolment, and your duties as a new employer from 1st October 2017.
What Is Auto-Enrolment?
Auto-enrolment is a Government initiative set up to help people save for retirement with a pension scheme. In the past, offering a pension scheme was up to the employer, meaning many employees missed out on saving for later life.
Under auto-enrolment, employers are legally obliged to enrol employees into a qualifying workplace pension scheme. The following are the criteria for employees:
- Aged between 22 and state pension age. You can find your state pension age
- Earning over £10,000 a year, £833 per month or £192 per week.
- Not already part of a workplace pension scheme.
- Working in the UK.
Detailed employee assessment guidelines from The Pensions Regulator can be found here.
Auto-Enrolment Staging Dates
The size of the business determines the date from which they must enrol employees into a workplace pension scheme, known as a ‘staging date’. You can find your business’s staging date by using the free auto-enrolment staging date calculator from The Pensions Regulator.
Once enrolled, employers and employees will both make contributions towards the employee’s workplace pension, the total contribution is currently 2% with at least a 1% employer contribution; this contribution will increase over time up to 8% with a 3% contribution from employers:
|Date||Employer minimum contribution||Employee minimum contribution||Total Contribution|
|Staging date to 5th April 2018||1%||1%||2%|
|6th April 2018 to 5th April 2019||2%||3%||5%|
|6th April 2019 onwards||3%||5%||8%|
To find out more about auto-enrolment and your obligations as an employee, visit our dedicated auto-enrolment page or talk to one of our experts on 0117 3790810.
So, What’s Changing?
As of 1st October 2017, new employers immediately have auto-enrolment duties to complete for any staff they employ; these duties apply from the first day the first member of staff begins working for them.
For new employers, this will mean preparation in advance of hiring a first employee to ensure you are compliant and avoid being fined:
- Choose a pension scheme – This should be done before hiring as it can take some time.
- Assess your staff – On your duties start date, you must assess your employees to determine whether or not they need to be put into a pension scheme.
- Write to your staff – Within 6 weeks of your duties start date, it is your legal duty to write to all your staff and explain how auto-enrolment applies to them.
- Declare your compliance – Within 5 months of your duties start date, you must have completed your declaration of compliance.
In order to complete your declaration of compliance, you should keep accurate and organised records of any automatic-enrolment activity.
Need A Hand?
Auto-enrolment doesn’t have to be a headache for new employers. At First Call, we have invested in Pensions Regulator approved software to help our clients keep track of the ages and earnings of all their staff; ensuring they stay compliant with Auto-enrolment duties.
For more help and advice regarding Auto-enrolment, or to find out how we can help you. Give us a call on 0117 379 0810 to arrange a free initial consultation.
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This post was written by Steph Roffey