Auto-enrolment

All employers have to meet the legal requirements to put their employees into a workplace pension scheme, like The People’s Pension, and to pay money into it.

What is auto-enrolment?

Good news. We’re living longer, healthier lives so in theory we get to have a longer retirement. But what many of us are finding is that we can’t afford to retire completely.

Auto-enrolment is government legislation on workplace pensions, designed to help people save for later life. All employers need to think about it – even if they only employ one person – because they may need to provide their employee(s) with a workplace pension.

How does auto-enrolment work?

With automatic enrolment an employer sets up a workplace pension scheme and enrols employees in to it.

Employees automatically make contributions to this pension, so does the government and the employer. This money builds up in a pension pot.

Most employed people are automatically enrolled into a workplace pension, but not everyone.

Employees need to:

  • be aged between 22 years old and under State Pension age
  • earn more than £10,000 a year (2018/2019)
  • work in the UK.

Auto-enrolment benefits: employees

More than half of UK adults who are planning on retiring1, expect that their financial situation will not support their desired lifestyle in retirement.

So, having the right workplace pension is more important than ever – it means that employers are helping their employees to save for their retirement.

And the great thing about a workplace pension is that it’s not just the employee who pays into a pension – the employer and the government contribute too. It’s extra ‘free’ money for the employee.

This money builds up in your personal pension pot and you can spend it when you retire, or any time after you reach 55 (the government proposes to increase this to age 57 from 2028).

Source1: https://bandce.co.uk/retirement-desired-lifestyles/

Most employed people are automatically enrolled into a workplace pension, but not everyone.

You need to:

  • be over 22 years old but under State Pension age
  • earn more than £10,000 a year (2018/2019)
  • work in the UK.

Don’t worry if you don’t meet these criteria. Your employer won’t automatically enrol you, but you may still join The People’s Pension. You should talk to your employer if you wish to join.

Postponing auto-enrolment

If your duties start date was less than 6 weeks ago, it may be possible to postpone for up to 3 months.

Be quick though, as the company’s employees need to be told about the postponement within 6 weeks of your duties start date.

Download: our template communication