Auto-Enrolment & NEST

The government has introduced legislation with the aim of making people save more for their retirement. It requires all UK employers to ‘auto-enrol‘ eligible workers into an employer pension scheme. This started being phased in from October 2012 for the very largest employers and will be fully rolled to all employers by 2018.

The deadlines are now fast approaching for small and mid-sized businesses.  Employers are required to register with the Pensions Regulator within 5 months of their staging date.

An employer will have to enrol all UK based employees into a workplace pension if all of the following criteria apply:

  • Earnings are more than £10,000 a year (tax year 2014/15)
  • They are not already in a suitable employer pension scheme
  • They are at least 22 years old, but under state pension age

There is a minimum initial level for employer contributions to be paid for employees who opt in. This increases in stages until the overall amount to be contributed to each individual employee’s pension pot will be minimum of 8%, broken down as follows:

  • A minimum of 3% by the employer
  • The balance by the individual employee, via payroll, who will get tax relief on their payment

This 8% contribution level will be in place by 1 October 2018.

As well as the cost of contributions the employer will also need to bear the implementation costs for the business – including providing information for employees.

Our team are already busy assisting our clients to get themselves organised for auto- enrolment. We can provide an integrated tailored in-house solution for clients covering:

  • Project management
  • Assisting with selection of suitable scheme
  • Independent financial advice for employees, where applicable
  • Integration with payroll routines
  • Costing calculations
  • Employee communications
  • Set up of Trust Base Schemes (e.g. NEST, Peoples Pension, NOW)
  • Taking on or re-engineering your payroll and systems, if necessary.


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