It doesn’t matter if you are a large or a small business, even if it’s just you and one employee, the new law about Workplace Pensions applys to you and in the next few years, you will have to offer your employees a pension scheme into which both you and they pay, by law. Please don’t ignore this Workplace Pension stuff because penalties will apply if you do. If you are unsure / don’t understand a word of it all, please seek advice.
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 – such as a cleaner, personal care assistant or nanny – you are an employer and will need to ensure that any eligible employees are enrolled into a workplace pension.
Don’t make the mistake of thinking that it doesn’t apply to you and that the cuddly looking guy above makes it OK to ignore it all. It isn’t OK to ignore it all because if you do penalties will apply.
Every employer with at least one member of staff will be required by law to provide Workplace Pensions in due course, if their employees meet the qualifying criteria.
Does the Workplace Pension Apply to Me and / or my Business?
If the following criteria apply to any of your employees you will need to enrol them into a workplace pension scheme:
- is not already in one
- is aged between 22 and the State Pension age
- earns more than £10,000 a year
- works in the UK
How much will it cost?
The minimum employer contributions are 1% of each employees’ 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. See table below:
Auto enrolment minimum contributions based on qualifying earnings
|Date||Employer minimum contribution||Total minimum contribution|
|Before April 5 2018*||1%||2% (including 1% staff contribution)|
|April 6 2018 – April 5 2019*||2%||5% (including 3% staff contribution)|
|April 6 2019 onwards*||3%||8% (including 5% staff contribution)|
*The proposed dates are subject to Parliament approval