Pensions auto enrolment is starting to hit small and medium-sized employers in the UK

Estimated reading time 3 minutes

In October 2012 pension changes were introduced in the UK requiring all employers to automatically enrol their employees in a pension scheme.  The changes are being phased in and until now have only affected large employers.  However, with most large employers now signed up, auto enrolment is starting to hit small and medium-sized employers. Auto-enrolment is compulsory for all UK employers – even if you employ just one person.  Below, we outline the key points you should know:

• You will be given a ‘staging date’ by which you must enrol all your relevant employees into an approved pension plan.

• Relevant employees are those who:

·         are aged between 22 and State Pension age;

·         earn more than £10,000 a year; and

·         work in the UK.

• There is a minimum contribution rate of 1% for employers, which will increase to 3% by 2018
• Employees will be given the option to ‘opt out’ of the pension plan – but only after they have been automatically enrolled.

With fines of up to £10,000 a day for non-compliance, it is essential that you are prepared for auto-enrolment.  Further details can be found in the brochure below, including information about choosing a pension scheme and tax effective ways of paying your contributions.

Resources

Abbiss Cadres auto-enrolment brochure

Further information

For further information or to discuss any of the issues raised, please contact Gary Cullen at Abbiss Cadres on +44 (0) 203 051 5711 Disclaimer Content is for general information purposes only.  The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice.  If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances.  In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article.  For further legal information see our legal page. Circular 230 disclosure To ensure compliance with requirements imposed by the IRS and other taxing authorities, we inform you that any tax advice contained in this article (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Copying If you would like to copy or otherwise reproduce this article then you may do so provided that: (1) any such copy or reproduction is for your own personal use or if it is made available to any third party it is done so on a free of charge basis; and (2) the article is reproduced in full together with the contact details, disclaimer and any logos as they appear on each article.