The new UK pension legislation states that from October 2012, employers must introduce auto enrolment.

This is a scheme whereby employers automatically enrol eligible employees into a workplace pension scheme which both parties must then contribute to. It is the employer’s duty by law to contact eligible jobholders and inform them of how the changes will affect them.


Employee eligibility

In order to be eligible for auto enrolment, you must have the following requirements:

• You must be working in the UK under contract
• You must be between 22 years old and state pension age
• Your earnings must be above £8,105

Temporary workers who work for agencies are included, but not those who are self-employed.

You do have the choice to opt out if you want to, you don’t have to stay within the scheme. Our society is older as people are living longer, and the new pension scheme has been put into place to address the issue of looking after people who are enjoying longer retirements than ever before. Unfortunately some people don’t think about pension schemes until it’s too late, and other people just don’t put enough money into their pensions, so by the time retirement comes along, they just can’t live off of their pensions.

Employers will be given staging dates which are based on the number of employees they have on the PAYE scheme. The biggest companies will get staging dates earlier, and the employers will be contacted between 6 and 12 months before their allocated staging date. Employers have a check list of things they will then need to do. This will include providing a qualifying scheme, enrolment of eligible workers, paying employers contributions and informing eligible jobholders that they have been enrolled and that they have the right to opt out.

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