In October 2012 pension changes were introduced in the UK requiring all employers to automatically enrol their employees in a pension scheme. The changes are being phased in and until now have only affected large employers. However, with most large employers now signed up, auto enrolment is starting to hit small and medium-sized employers.
Auto-enrolment is compulsory for all UK employers – even if you employ just one person. Below, we outline the key points you should know:
- You will be given a ‘staging date’ by which you must enrol all your relevant employees into an approved pension plan.
- Relevant employees are those who:
· are aged between 22 and State Pension age;
· earn more than £10,000 a year; and
· work in the UK.
- There is a minimum contribution rate of 1% for employers, which will increase to 3% by 2018
- Employees will be given the option to ‘opt out’ of the pension plan – but only after they have been automatically enrolled.
With fines of up to £10,000 a day for non-compliance, it is essential that you are prepared for auto-enrolment. Further details can be found in the brochure below, including information about choosing a pension scheme and tax effective ways of paying your contributions.
For further information or to discuss any of the issues raised, please contact Gary Cullen at Abbiss Cadres on +44 (0) 203 051 5711
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