As a result of Automatic Enrolment, millions of people now have a workplace pension. Find out how this affects your business.
Under the Pensions Act 2008, every employer in the UK must put certain staff into a pension scheme and contribute towards it. This is called ‘automatic enrolment’.
If you employ at least one person you are an employer and you have certain legal duties. It’s important that you understand what to do and by when, so you can meet your automatic enrolment duties.
Check you’re an employer
You’re usually an employer if you deduct tax and National Insurance contributions from an employee’s wages.
Automatic enrolment duties do not apply when a company or individual are not considered an employer. For example, you may no longer employ any staff, you have ceased trading, or you’re the director of a company with no other employees.
About workplace pension
Workplace pension is a way of saving for employees retirement that’s arranged by employer.
A percentage of employees pay is put into the pension scheme automatically every payday. In most cases, employer also adds money into the pension scheme for employees.
If you are not sure, check you are an employer on GOV.UK website.
Workplace pension scheme
All employers must provide a workplace pension scheme. Employer must automatically enrol employee into a pension scheme and make contributions to his pension if all of the following apply:
- classed as “worker”
- aged between 22 and the State Pension age,
- earn at least £10,000 a year,
- work in the UK.
You must set up a workplace pension scheme, if you don’t already offer one. As employer you need to choose a pension scheme that is set up for automatic enrolment. You’ll need to find a scheme yourself or get help from your accountant or a financial adviser.
Having the right payroll software can help you manage your automatic enrolment duties, as it can automate many of the tasks which will need to be done every pay cycle.