As a result of Automatic Enrolment, millions of people now have a workplace pension. Find out how this applies to you.
The law on workplace pensions has changed. Under the Pensions Act 2008, every employer in the UK must put certain staff into a pension scheme and contribute towards it. This is called ‘Automatic Enrolment’.
Automatic Enrolment applies to all employers who have at least one member of staff. It doesn’t just apply to businesses; if you employ someone directly to work for you – like a cleaner, personal care assistant or nanny, for example – you are an employer and will need to ensure that any eligible employees are enrolled into a workplace pension.
To find out if it applies to you, visit The Pensions Regulator’s website and use the duties checker. This tool will ask you a few short questions about your employees, to work out which duties apply to you and when. The duties checker will give you tailored help and guidance through the steps to complete any Automatic Enrolment duties you may have.
The minimum contributions that you and your staff pay into your Automatic Enrolment workplace pension scheme are increasing. This is also sometimes known as phasing. Minimum contributions are increasing in two phases. The first increase must be in place from 6 April 2018 and the second from 6 April 2019.
You, the employer, must make a minimum contribution towards this amount and your staff member must make up the difference. If you decide to cover the total minimum contribution required, your staff won’t need to pay anything.
|Date effective||Employer minimum contribution||Staff contribution||Total minimum contribution|
|Currently until 5 April 2018||1%||1%||2%|
|6 April 2018 to 5 April 2019||2%||3%||5%|
|6 April 2019 onwards||3%||5%||8%|
If you deduct income tax and National Insurance contributions from the wages of the person you employ, then you are usually their employer. If you have used an agency to hire the person and the agency pays their National Insurance contributions, the agency is the employer and you don’t need to do anything. Find out how Automatic Enrolment applies to you using the duties checker on The Pensions Regulator’s website.
If you need further guidance on whether you may be considered an employer or not, read our page still unsure if I’m an employer.
*The PAYE reference can be found on letters you have received from The Pensions Regulator about Automatic Enrolment. Alternatively, it can be found on the letter HMRC sent you when you first registered as an employer or from your payroll software package.
The Pensions Regulator is a public body set up by the UK Government to regulate work-based pensions. There is information and help available on their website and they write to all employers to provide additional guidance.
Don’t ignore the Workplace Pension. It’s the law.