What is auto enrolment
Workplace pension law changed in October 2012 and all employers now have a legal duty to help their employees save for retirement.
The law has already come into force for large employers, such as Marks & Spencer, with smaller employers being phased in over the next six years.
Automatic enrolment is a key part of the Workplace Pension Reform. This means that certain employees must be automatically enrolled into a pension scheme, and the employer will need to make a contribution towards this.
Why is this happening?
Quite simply, the Government may not be able to afford to keep State Pensions at their current level in the longer term and with people living longer there will be an even greater strain on the Government’s purse strings.
The Government estimates that seven million people are either not saving enough or are failing to save at all for their retirement.
Automatic enrolment is being introduced to help tackle these issues. The Pensions Act 2008 introduced new legislation to encourage employees to save for retirement and gives employees improved access to a pension scheme, with eligible workers being automatically enrolled. All employers are required to comply with the scheme which will be enforced by The Pensions Regulator.
Auto enrolment aims to make it easier for employees to join and contribute to a pension scheme and they will also benefit from contributions made by their employer. The statutory contribution levels will be phased in, giving you and your employer time to adjust.
Whether you’re an employer looking to set up a new pension scheme or an employee planning for your retirement we can provide the advice you need. Contact our team for more details.
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