Every now and then the government introduces new reforms to pensions which change, and often help to improve, the way they are run.
Increase to auto-enrolment minimum contributions
April 2018 & April 2019:
The minimum amount that must be paid into an employee’s pension is going up.
The ‘minimum contributions’ will increase in two phases: 6 April 2018 and then again on 6 April 2019.
Pension freedoms and choice
In April 2015, changes came into effect giving people greater freedom and choice in the options available to them when accessing their pension savings.
Before April 2015, most people used their defined contribution pension savings to buy an annuity. Now, when people reach the minimum pension age (currently 55), they can also take their money in lump sums, regular or occasional income payments or as a combination of all three.
People can get free, impartial guidance from the government-backed service called Pension Wise.
Auto-enrolment pension rules
From October 2012:
In October 2012, auto-enrolment was introduced to encourage people to save for their retirement and not just to rely on the State Pension.
This requires every employer who employs at least 1 person to:
- offer a qualifying workplace pension scheme to their workers;
- put certain staff into their chosen scheme and pay a minimum level of contribution.
- provide information to their other employees about the right to join the scheme.