The Week’s Top Energy News – 02/12/2016
The Christmas season has well and truly begun and, in true business style, you’ll either be incredibly b...Read More
‘That’s an age away’, I hear you cry. But the Pensions Regulator recommends employers start preparing for auto enrolment nine to 12 months in advance. So you could be on the back foot already.
And with many small businesses lacking a dedicated payroll team, it’s up to owners to gen up on their auto enrolment responsibilities – or risk fines.
Here’s what you need to know about auto enrolment and key dates for your diary.
Auto enrolment requires all employers, large and small, to enrol eligible employees into a work pension. Eligible employees are those aged between 22 and State Pension age, who earn more than £10k a year and work in the UK. Both employers and employees must contribute to the pension, plus there is tax relief. Tax relief means that some of the employee earnings that would have gone to the government as tax go into the workplace pension instead. Employers must make a minimum contribution of 1% of employee earnings, rising to 2% from October 2017 and 3% from October 2018.
To work out your circumstances try the free government-backed Money Advice Service’s handy workplace pension contribution calculator.
It’s the government’s bid to get more of us saving for old age, with workers retiring with an income from their workplace pension as well as their State Pension.
Auto enrolment is well underway. The first workers were enrolled in 2012 starting with the largest employers. The rollout extends to the smallest firms by 2017.
The auto enrolment period for firms with up to 49 employees runs from 1 June 2015 to 1 April 2017, starting with businesses with 30-49 workers, then employers with fewer than 30 staff. Your firm’s exact date to start auto enrolling employees within this period is called your staging date and is based on the number of staff on your PAYE scheme as at April 2012. Business established after April 2012 will start auto enrolment from May 2017 onwards.
The Pensions Regulator will write to alert you 12 months and three months before your staging date. If you have your firm’s PAYE reference you can check your staging date on the Pension Regulator’s website. PAYE reference doesn’t work? Have certain types of staff but no PAYE scheme? Find auto enrolment staging date exceptions here.
Information on these three points and more can be found in The Pension Regulator’s clear, concise, must-read guide ‘The essential guide to automatic enrolment – Information for employers’.
The Pensions Regulator’s executive director for automatic enrolment Charles Counsell has urged employers to act now.
He says: “More than 43,000 employers have automatically enrolled their staff into a pension and nearly half of them said they wished they had left more time as it took them longer than they thought.
“We encourage all employers, however small, to learn from the experience of other employers – leaving extra time is better than leaving it too late.”
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