Pension Auto Enrolment – Everything you need to know


As many of you will already be aware Pension Auto Enrolment, the regime that requires all employers, no matter how large or small, to offer their staff a pension scheme, to enrol all those staff who don’t expressly opt out, and to make contributions on their behalf, was introduced in 2012 and will affect all employers by 2018.

So far, the scheme has been hailed as a success by the government, with around nine in 10 people who have been put into a pension choosing to stay in it. Employees have the right to opt out of the scheme but they must be enrolled into it before they can chose to opt out.

Employers are being brought into the scheme progressively by being assigned a “staging date” you should have received this by now.

Under auto-enrolment, a percentage of the employee’s pay is automatically put into a pension. The employer also contributes, with government contributions also being made through tax relief.

The current total minimum auto-enrolment payment is 2 per cent of salary. But the minimum auto-enrolment level is set to rise in stages to a total of 8 per cent in 2018.

At present, employers must contribute 1 per cent of an employee’s qualifying earnings, but from October 2017 this will increase to 2 per cent and from October 2018 it will increase again, to 3 per cent.

Failure to provide a compliant pension will result in fines and possible prosecution. Recent research carried out by NEST (The National Employment Savings Trust) showed an overwhelming majority (84 percent) of small and micro employers yet to stage for Pension Auto Enrolment do not currently have an active pension scheme in place, and around half (48 percent) are not sure of when they need to meet the new pension legislation or their staging date.

If you are unsure when your staging date is or would like help in getting your business ready for Pension Auto Enrolment get in touch or call 0161 249 5040