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Auto-Enrolment & Workplace Pensions

Most business's will need qualified advice in setting up their Workplace Pension and Auto-Enrolment.

Who will be automatically enrolled?

Automatic- enrolment.

This was introduced by law in 2012.  The law states that all employers must have a workplace pension in place and enrol all eligible workers into the scheme.  Larger employers were the first to automatically enrol workers and by 2018 this will be done by all employers regardless of size.

The changing rules of workplace pensions

The government have made major changes to help people save more for their retirement.

Workers previously had to decide whether to join an employer’s pension scheme if they were one available.

The changes mean that every eligible worker will be automatically enrolled into a workplace pension.  The employee can choose to opt out but only after been opted in.

This will make it a lot easier for many more people to save for their retirement.  It will be deducted from employee’s salary and will include an employer’s contribution also tax relief.

As an employer when will I have to put a work-place pension in place?

All employers will have a staging date if you are unsure please contact Chris Johnson at Ayton-Law and he will be able to help you with the staging date.

Ideally you as an employer should start looking into the Auto-enrolment process at least 12 months before your staging date.

Which staff will I have to automatically enrol?

  • In tax year (2015/2016) and you earn more than £10,000 per year
  • And you work in UK
  • You are aged 22 or over and under current state pension age
  • You are not already a member of an existing workplace pension for example a Final Salary Scheme, a suitable Group Personal or Group Stakeholder Pension Scheme

If you meet the criteria above you will also be enrolled even if you are on maternity leave, adoption, carers leave, short term contractors, or an agency pays your wages.

As an employee if I opt out of my workplace pension?

If you opt out you lose out on tax relief and your employer’s contributions.

To opt out you have to contact your pension scheme direct your employee is not allowed to have any opt out forms.  Once you have received opt out form you complete details and hand back to employer.

If you opt out within one month you will have your payments returned to you.

If you opt out after one month your money your contributions will remain in pension fund.

If you decide to opt out you can opt back in at anytime.  However every three years if you meet criteria you will be automatically enrolled again.

How much will it cost the employee?

The total minimum is currently set at 2% of gross qualifying earnings (£5,824-£42,385).

(0.8% from employees, 0.2% as tax relief and 1% from employer).  Your qualifying earnings will include overtime and bonuses.

Will my payments increase in the future?

The current minimum will increase from October 2017 as follows.

  • October 2017-September 2018 5% of qualifying earnings. (2.4% employee 0.6% tax relief and 2% employer.)
  • Then from October 2018 onwards 8% of your qualifying earnings. (4% employee, 1% tax relief and 3% employer).

At Ayton-Law we have a work-place pension specialist who has experience in advising businesses on Auto-enrolment and work-place pensions with many satisfied clients throughout the North-East.  He also works alongside accountants advising and helping them with the auto-enrolment process and regulation.

OUR EXPERTS IN WORKPLACE PENSIONS/AUTO-ENROLMENT  OFFERS EMPLOYERS AND EMPLOYEES ADVICE THROUGHOUT NORTH YORKSHIRE, CLEVELAND; CO DURHAM: TEESSIDE, YORK,NORTHALLERTON AND HARROGATE. WE PROVIDE YOU WITH JARGON FREE ADVICE AND SEMINARS ON WORKPLACE PENSIONS AT YOUR BUSINESS LOCATION.

AYTON-LAW HAVE BUSINESS CLIENTS ACROSS MIDDLESBROUGH,NUNTHORPE;MARTON: STOCKTON ON TEES; STOKESLEY: RICHMOND, GREAT AYTON; HARTLEPOOL,RICHMOND:,DURHAM;REDCAR:MARSKE:SALTBURN ,THIRSK;RICHMOND AND WHITBY.

Contact Chris Johnson DipFA or Ed Randall for further details on 01642659500

or email chris.ayton-law@ntlbusiness.com or ed.ayton-law@ntlbusiness.com

A PENSION IS A LONG TERM INVESTMENT THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN. YOUR EVENTUAL INCOME MAY DEPEND UPON THE SIZE OF THE FUND AT RETIREMENT, FUTURE INTEREST RATES AND TAX LEGISLATION.

THE PENSIONS REGULATOR IS THE STATUTORY REGULATOR FOR WORKPLACE PENSIONS.

THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE AUTO ENROLMENT