Pension Auto Enrolment
The law on workplace pensions has changed. Under the Pensions Act 2008, workplace pensions have become ‘opt-out’ rather than ‘opt-in’, which means most employees are automatically enrolled into a pension provided by their employer. The law also requires employers to pay into their employees’ pension schemes.
The law has been brought into force gradually, beginning with big employers before rolling out to smaller workplaces. As of early 2018, Auto Enrolment rules now apply to all employers in the UK.
Who does the workplace pension law apply to?
Generally, if you’re a UK-based employee aged between 22 and State Pension age and you earn at least £10,000 per year, you will be automatically enrolled into your workplace pension scheme.
How much do employers and employees need to contribute?
Currently, the minimum employee contribution into an Auto Enrolment pension scheme is 5% of your annual ‘qualifying earnings’, which includes tax relief of 1%. The law also requires your employer to pay at least 3%.
About PensionBee
PensionBee combines and transfers all your old pensions into one new online plan. Find out more about PensionBee or sign up now.
Risk warning
As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.
Last edited: 28-03-2019
