Auto-enrolment

The government is trying to encourage people to save for retirement.

To help achieve this, employers are required to set up a pension scheme and automatically enrol eligible workers.

Employers and employees contribute into the pension pot based on the employee's qualifying earnings. The current minimum (2019/20) rates are 5% for employees and 3% for employers. 

Pension schemes have to meet certain conditions in order to comply with auto-enrolment.

Who is eligible?

Workers aged between 22 and their state pension age who earn more than £10,000 a year must be auto-enrolled in a workplace pension.

Other workers who don't meet these criteria may have the option to join a workplace pension scheme.

How are employers affected?

Employers are responsible for making sure they meet their auto-enrolment duties. This includes:

  • identifying eligible workers
  • letting staff know how they will be affected
  • choosing a pension scheme which meets the conditions for auto-enrolment
  • making payments
  • ensuring ongoing compliance such as auto enrolling workers who become eligible
  • completing a re-declaration of compliance every 3 years to The Pensions Regulator.
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