As many employers, both those running big businesses with hundreds of employees and those with smaller and medium sized enterprises, will be aware this year sees major changes to pension legislation in the UK with the introduction of something referred to as an ‘automatic enrollment pension’ scheme. The motivation behind the planned changes is to try to get more of the workforce in Britain saving for their retirement from an earlier stage in their working lives. This comes from recognition of the fact that – with an aging population – it is vital for as many people as possible to have made financial provision for themselves for when they are no longer able to work. This has already happened in countries like Australia where employers contribute 9.5% to pensions https://www.industrysuper.com/retirement-info/pension-changes/.
The automatic enrolment pension is at the heart of the changes which will become law throughout the UK this year, and it basically means a pension scheme in which employers must automatically submit all of their eligible employees for. Those eligible will be any employee who is over 22 years of age and under the current pensionable age in the UK, and employers will be required by law to enrol them in either the new National Employment Savings Trust set up by the Government as part of the legislation or a private pension scheme of their own which fits the criteria. Consider companies like www.nowpensions.com who may be able to aid you with doing this.
There are two major changes under the new legislation that both employers and employees need to be aware of. The first of these being the legal obligation in the automatic enrolment pension scheme; whereas before employees could choose whether or not to sign up to a pension scheme. However each employee has the option of withdrawing from the scheme for a month after being automatically enrolled for it should they decide against it. The second major change is that employers are now required to pay into the pension scheme as well as putting employee earnings into it. The minimum that employers can contribute is 3 percent of the total 8 percent of qualifying earnings required to be contributed by employer and employee.