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Automatic Enrolment

The government is in the process of introducing new regulations for all employers in relation to pensions. The process, which is known as auto enrolment, is designed to encourage your work force to save for their retirement. As a consequence, all employers will need to enrol their workers into a work place pension scheme.

There are three types of workers categorised by their age and earnings:

Eligible jobholders must be automatically enrolled into a work place pension scheme. These are workers who are:
            - Aged between 22 and state pension age
            - Working in the UK
            - Earning more than the tax threshold (£10,000 p.a. for 2014/15)

Non-eligible jobholders are not automatically enrolled but have the right to opt in to a work place pension scheme. These are workers who are:
            - Aged between 16 and 74
            - Working in the UK
            - Earning more than the lower earnings limit (£5,772 p.a. for 2014/15) but less than the tax threshold (£10,000 p.a. for 2014/15)
     Or   - Aged 16 to 21, or state pension age to 74
            - Working in the UK
            - Earning more than the tax threshold (£10,000 p.a. for 2014/15)

Entitled workers are not automatically enrolled but have the right to join a work place pension scheme. These are workers who are:
             - Aged between 16 and 74
             - Working in the UK
             - Earning below the lower earnings limit (£5,772 p.a. for 2014/15)

For all eligible Jobholders, both employer and employee will be required to make a minimum contribution (currently a total of 2%) into a designated (and approved) workplace pension scheme. The minimum contribution level will rise over time (currently set at 9% from October 2018).

The date on which you are obliged to auto-enrol (your staging date) depends upon the number of employees that you had on your payroll at 1st April 2012, or the date you first registered a PAYE scheme, if this was after 1st April 2012.

To find out the staging date for your business, simply type in your PAYE scheme reference into the government website:

Click on this link to transfer to the government website

For many, the staging date may seem a distant issue, however, you need to act early. The pension regulator has predicted that from 2016 over 100,000 businesses per quarter will be required to auto enrol their workforce, which will result in significant pressures on accountants, financial advisors and pension providers. We anticipate that pension providers will be unable to cope with the amount of paperwork this will entail, and are already aware that many well known pension providers have distanced themselves from work place pension schemes altogether.

It is vital that employers consider the implications of auto enrolment well in advance of their staging date as there is a penalty regime in place for any business that does not comply with the regulations.

Please click on this link to find out more about our Auto Enrolment services.

Wickford Accountants Office

Clay Ratnage Strevens & Hills
Construction House
Runwell Road
Wickford
Essex
SS11 7HQ
 

Phone: 01268 735363

Fax: 01268 560537

 

Romford Accountants Office

Clay Ratnage Daffin & Company
Suite D, The Business Centre
Faringdon Avenue
Romford
Essex
RM3 8EN
 

Phone: 01708 349095

Fax :01708 371039

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We provide support to local family businesses in Wickford, Basildon, Romford, Brentwood, Billericay, Upminster and the surrounding areas.