Auto Enrolment For Individuals Explained

Auto Enrolment For Individuals Explained

By 2018 all UK employers must provide all employees earning £10,000, and aged between 22 and state pension age, with a workplace pension scheme. The size of pension contribution is based on the individual’s earnings, although this is set to rise in the future.

What are the Criteria for a Workplace Pension Scheme?

• Usually working in the UK
• Do not already have a workplace pension or are self-employed
• Earning more than £10,000

Workers on short-term contracts and agency workers are also eligible for this scheme, provided they meet the other criteria. Those on maternity, adoption and carers leave can also expect to receive the same benefits.

Who Won’t Be Automatically Enrolled?

• Those who have given notice to leave the job
• People with Lifetime Allowance Protection from HMRC
• Already have a Workplace Pension
• Director without an employment contract
• You’re in a Limited Liability Partnership
• You’ve Opted out of a pension arranged through your employer

What Happens Next?

Once you have been automatically enrolled, your employer must inform you of the following:
• The date your pension scheme started
• Details of your pension scheme and who runs it
• The breakdown of contributions
• How to leave the scheme
• How tax relief applies to you

What are the Contributions?

The size of pension contribution is based on the individual’s earnings. Although this is set to raise in the future, the percentage is currently 2% of earnings; 0.8% from employee, 1% from the employer and 0.2% in tax relief from the government.

DateEmployer Minimum ContributionStaff Minimum ContributionGovernment Tax ReliefTotal Contributions
Currently 1%0.8%0.2%2% of Earnings
From April 20182%2.4%0.6%5% of Earnings
From April 20193%4%1%8% of Earnings

Further Reading:

Government Advice on Auto Enrolment for Individuals

18 Year Olds to Receive Auto Enrolment Benefits

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