Debbie & Peter have asked me to add a guest blog to help with Automatic Enrolment which has started to roll out from this month. A lot of confusion has resulted from this and now the advertising campaign has started on national television, I have started to receive many enquiries.
Automatic Enrolment is a government backed initiative to help all employees to save more for their retirement in partnership with their employers. Dependant on the size of your business, you will be required to offer your employees a pension within a certain timescale which is both linked to your PAYE reference and size of your workforce. I can let you know when this date will be or you can use the staging date link below to find out your own. This will involve a contribution from both employer and employee with a choice of financial providers including The National Employment Savings Trust otherwise known as NEST.
Existing pension schemes may be suitable to continue as before as long as the scheme passes certain tests to ensure it will be suitable going forward.
Initially, the legal minimum will be 2 per cent of a worker’s qualifying earnings. Of this, the employer will need to pay at least 1 per cent and employers can pay more if they want to.
By 2018 the minimum contribution level will have risen gradually to 8 per cent of which employers will need to pay at least 3 per cent.
I have tried to keep this information relatively simple as there is a lot more to consider and hope the following links will help add more clarity.
Please also note that this is very different from offering Stakeholder pensions and the penalties for not complying are very severe.
On a lighter note do not hesitate to contact me further to discuss and I will be delighted to discuss any questions or visit your business to discuss face to face.
I hope this helps!
Independent Financial Adviser
New Leaf Financial Services LTD
01484 483147 / 07825287638