|Pension automatic enrolment||PENSION|
Automatic enrolment for workplace pensions is intended to encourage employees to start making provision for their retirement with employers, with the government contributing to making a larger pension pot.
The timetable for employers to begin enrolling their staff started with the UK’s largest businesses in 2012, followed by medium, and then small and micro companies. It is expected that all employers will be part of the scheme by early 2018.
The law states that employers (after their staging date) must automatically enrol workers into a workplace pension if they are aged between 22 and State Pension Age, earn more than minimum earning threshold, work in the UK and are not already a member of a qualifying work pension scheme.
Both the employer and employee need to make contributions to a pension scheme. By 6 April 2019, contributions in total will be a minimum 8%: 3% from the employer, 4% from the employee and an additional 1% in tax relief.
For the current tax year, the level of qualifying earnings is set at between £5,824 and £43,000 a year. The qualifying earnings thresholds for 2017-18 have recently been published. Subject to Parliamentary approval, the level of qualifying earnings will be set between £5,876 and £45,000 in 2017-18. The minimum earning threshold for automatic enrolment is expected to remain at £10,000.
February 27th, 2017