Pension Auto Enrolment
Do UK companies have to provide a pension scheme?
The law now obliges every UK workplace to offer a workplace pension scheme that fulfils certain criteria, and to make contributions to the pension plans of employees who are paying into the scheme.
Pension rules for employers
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.
These company pension rules have 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 {{_earnings_trigger} per year, you will be automatically enrolled into your workplace pension scheme.
Is a pension mandatory?
Paying into a pension is one of the most tax-efficient ways of saving for retirement. However, while workplace employees are auto-enrolled into their employer’s pension scheme, they may opt-out if they wish.
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
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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: 06-04-2024
