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What does your company need to know about auto-enrolment?

Monday, December 21st, 2015


By 2018, all companies in the UK will be required by law to enrol their employees into a pension scheme. But for many firms, the ‘staging date’ – the date on which these obligations come into force –  will come much sooner than that. It begs a series of questions, such as: do you know your own business’s staging date? Do you know what you have to do to be prepared, and are you prepared?

The exact date at which auto-enrolment starts for your business depends on its size. Those employing at least 59 people, for instance, were already required to do so in 2014, which leaves the period from 2015 to 2018 for those employing fewer. As long as you have your PAYE reference, you can easily use the website of The Pensions Regulator to find out your staging date.

Can I delay this ‘staging date’?

The staging date is strict – although you do have the option to postpone enrolment for three months after this date, you will still need to have a scheme in place by then to accommodate employees who want to opt in straight away. You don’t have to enrol all of your staff into your scheme, but you do have to automatically enrol those who are aged 22 years or older and under state pension age, and who earn over a certain earnings ‘trigger’, which was £10,000 as of 2014/15.

Employees on temporary, part-time and casual (zero-hours) contracts who meet the above conditions will all need to be automatically enrolled by your company, with those who earn less than the trigger also being entitled to join.

How much is my company required to contribute?

As of 2014, Employers and employees were first required to contribute 1% of “qualifying” earnings, with this increasing in stages until 2018, when a total of 8% will need to be paid in, with at least 3% being paid by employers. One or both parties have the option of paying more if they wish.

Employees wishing to opt out must make an active decision to do so, and even those that do are required to be re-enrolled by their employer every three years. Meanwhile, firms that miss the staging date for auto-enrolment could face heavily statutory fines of up to £10,000 a day.

Would you like to be helped with your own company’s auto-enrolment responsibilities? If so, simply contact the seasoned experts at Accounting People for suitably tailored assistance and guidance.


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