We get asked lots of questions with regards to Automatic Enrolment, whilst we answer the questions at no point do we offer any advice with regards to Pensions or Financial matters, and would refer you to a qualified and registered finanical adviser.
Automatic Enrolment is a Government worplace pension scheme that both yourself and your employer must pay into.
It is to help boost your retirement savings and is taken at source when you get paid.
Automatic enrolment means what it says on the tin, you will be automatically enrolled into the workplace pension scheme and should you not wish to contribute, you must opt-out.
However, by opting out, you will also no longer receive the contribution from your employer.
Not all workers are eligble to be automatically enrolled, this includes employees under the age of 22 or those not earning more than £10k per annum from a single job.
At the moment, Auto-Enrolment is for employees 22 years and over up to the state pension age, that earn more than £10,000 per annum from one job.
If you earn less than £10,000 but more than £6,136 (Correct as of the 14th January 2020), you can ask to opt-in to your employers pension scheme, in which case they must also contribute at the correct rates.
If you’re a sole company director with no other staff or you are self employed, you are excluded on this.
A percentage set by the UK Government is set and your employee and yourself must pay this amount into the Auto Enrolment pension.
This is deducted at source and you may also receive tax relief from the government.
Your employer must automatically add you to the pension scheme when you start employment, this system will then tell them if you are eiligible.
Usually you will be enrolled if you meet the following criteria:
– You’re classed as a worker
– You’re aged 22 and above, upto State Pension Age.
– You earn at least £10k per annum from one job.
– You ordinarily work in the UK
No, your employer must not encourage, force or unfairly dismiss you for being in the auto enrolment pension scheme.
If the pension provider was authorised by the FCA, you can get compensation from the FSCS.
However, most modern pension schemes such as NEST and Auto Enrolment pension schemes are ring fenced from the company.
Read more about Auto Enrolment…
- Workplace Pensions- UK.GOV
- What is Pension Auto-Enrolment – Martin Lewis
- Automatic Enrolment – The Pensions Advisory Service