Auto enrolment

Auto enrolment in plain English - find out what it is, what it means for your business, and how to start preparing.

What is Auto Enrolment?

Workplace pension law has changed in recent years; under the Pensions Act 2008, every employer now has a legal requirement to help their employees save for retirement by automatically enrolling eligible workers into a workplace pension scheme and contributing towards it.

This is referred to as Automatic Enrolment and it applies to all businesses in the UK who employ at least one member of staff. The statutory contributions that you will need to make will be phased in over time, giving you time to adjust.

Why is this happening?

The Government may not be able to afford to keep state pensions at their current level in the longer term; people are living longer and are likely to sustain a longer retirement, so the size of their pension fund will need to be greater to support this.

Auto enrolment has been introduced to tackle these issues, aiming to make it easier for your employees to join and contribute to a pension scheme, as well as allowing them to benefit from employer contributions.

When will it affect my business?

Each employer will be given a date from which their changes will have to be in place. This is known as your ‘staging date’, and is broadly based on the number of people you have in your PAYE scheme. Large businesses have already staged, and by 2018 businesses of all sizes will have been through the process; meaning they must have automatically enrolled their eligible employees. You do have the option to postpone your staging date should you need to.

The Pension’s Regulator will contact you 6 to 12 months before your staging date. If you’re not sure when you’re staging date is, you can find out from The Pensions Regulator.

Assessing your workers for an auto enrolment pension scheme

As an employer it’s your duty to assess your workers to determine whether or not they will need to be automatically enrolled into a pension scheme. Our handy flow chart has been designed to guide you in assessing your workers for auto enrolment, understanding whether they should be enrolled automatically, or may choose to opt in. Follow our auto enrolment pension flow chart to determine the eligibility of each of your workers.

Find out how to prepare your business for auto enrolment with our simple instructions to getting started.

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