Company Pensions and Auto Enrolment
In the words of HMRC ‘We're all in …’
Every employer must provide some form of workplace pension for those workers who are eligible, we can help discuss workplace pensions with employers on behalf of their employees.
This includes automatically enrolling Eligible Jobholder workers into a workplace pension scheme who -
- are aged between 22 and State Pension age;
- qualifying earnings and earn more than £10,000 (2023/2024) a year;
- working or ordinary working in the UK.
This is to encourage people to start taking responsibility to save for their retirement. Your staff can opt out if they want to but that means losing out on employer and government contributions.
How much will I have to contribute?
There is a minimum total amount that has to be contributed by the employee, employer and the government in the form of tax relief. This total minimum contribution is currently set at 8% of earnings (4% from the employee, 3% from the employer and 1% as tax relief).
The minimum contribution applies to anything earned over £6,240 (in the tax year 2023/2024) up to a limit of £50,270. This includes overtime and bonus payments. So for an employee earning £18,000 a year the minimum contribution would be a percentage of £11,760 (the difference between £6,240 and £18,000).
The total minimum contribution is currently set at 8% of earnings (4% from the employee, 3% from the employer and 1% as tax relief).
- base contributions on qualifying earnings (as above);
- Use an alternative definition (such as basic pay) and pay contributions from 'pound zero'. The latter is not included within the information provided.
We can help communicate the principles of Auto-Enrolment with your employees and how to maximise their pension savings to provide for a comfortable retirement.
With our knowledge and experience of the pensions market and understanding of the rules of auto enrolment we are able to provide solutions which will enable you to introduce the new pension arrangements with minimum disruption.
A PENSION IS A LONG TERM INVESTMENT THE FUND VALUE MAY FLUCTUATE AND CAN GO DOWN. YOUR EVENTUAL INCOME MAY DEPEND UPON THE SIZE OF THE FUND AT RETIREMENT, FUTURE INTEREST RATES AND TAX LEGISLATION.
THE PENSIONS REGULATOR IS THE STATUTORY REGULATOR FOR WORKPLACE PENSIONS.AUTO ENROLMENT IS NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.