Enjoy yourself it’s later than you think by Rob Grinter

The Government is introducing major changes to the way employees save for their retirement and employers will have to contribute tooPension money

All employers, starting with the largest employers first, must automatically enrol their eligible workers into a workplace pension, if they: 

  • Are at least 22 years old;
  • Have not reached state pension age;
  • Earn more than a £9,440 per year
  • Are not already in a qualifying scheme

Certain employees who are not eligible may also choose to “opt in” to their employer’s scheme.

The employer must automatically enrol employees into a pension scheme but the employee can opt out of it. Research shows that very few employees opt out.

Under this new system the employer pays a monthly contribution and the government tops this up by adding tax relief to it. The employer also pays a monthly contribution.

If your employer decides to contribute the minimum required, the total contribution to your workplace pension pot is made up as follows (source: The Pensions Regulator).

You pay Your employer pays The Government pays (your tax relief)
0.8% of your qualifying earnings rising to 4% by 2018 1% of your qualifying earnings rising to 3% by 2018 0.2% of your qualifying earnings rising to 1% by 2018


Employers need to find out when they will have to “go live”. They can do this by finding out their staging date on Pension Regulators website at www.thepensionsregulator.gov.uk .

Employers may need to consult a pension advisor and to leave at least four months to set up a workplace pension scheme. They will also have to communicate how the scheme will work to their employees at an early stage.

Employees can find out how much they will have to contribute by visiting The Money Advice Service website at www.moneyadviceservice.org.uk

Now is the time to find out how Pension Auto Enrolment will affect you.

Be sure to head over to markdavidhr.co.uk to find out more.




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