Starting from October this year, and depending on the size of your business, employers will have to automatically enrol all eligible workers into a qualifying pension scheme. The Government has now confirmed that automatic enrolment rates for the next tax year will be aligned alongside tax and national insurance thresholds, in the hope that it will make it easier for firms to work out which staff are eligible.
The following rates will now apply:
- £8,105 will be the trigger in which an employee must be automatically enrolled – this is in line with the personal allowance.
- An employee earning between £5,564 up to the £8,105 trigger can choose whether or not to opt in.
- Qualifying earnings – in which an employer must contribute towards an employee’s pension – will sit between the lower limit of £5,564 and the higher threshold of £42,475. Employees within this threshold who choose to remain opted in must get an employer contribution.
- Those earning less than £5,564 are entitled to join a pension scheme, although employers will not be required to contribute on their behalf.
Businesses will need to offer their employees auto-enrolment at different commencement dates from October 2012 and 1 January 2016. We can help your business implement an auto-enrolment programme.