Auto enrolment pension scheme changes affecting small businesses

News

15th October 2015

Earlier this year (1st March), businesses with fewer than 58 employees had to start complying with the new auto enrolment pension legislation and by June 1st, those with fewer than 30 staff were to be captured by the legislation as well.

What is auto enrolment?

Auto enrolment is the UK’s new workplace pensions initiative. Designed to get a larger proportion of the population saving for retirement, the policy makes it a legal requirement for all employers to automatically enroll any employee who meets the below requirements into a workplace pension and makes contributions to that pension:

– Is between the age of 22 and State Pension Age (65)
– Earns more than £10,000 a year*.

How much will it cost?

The minimum employer contributions are 1% of each employee’s qualifying earnings, increasing to 3% over time. Employees will also contribute with a minimum of 1% of their qualifying earnings, increasing to 5% over time.

If you’re worried about this change or unsure whether you or your business will be affected please don’t hesitate to contact us where we’ll be happy to advise you more on the matter.

 

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