Auto-enrolment is set to hit small enterprises but why is it happening? Accountants and financial planners Clarke Nicklin suggest – ‘the Government owes in excess of £890 billion and can no longer afford to support the UK’s ageing population, and also £7 million of us are not saving enough for retirement.’
When did it happen? – Auto-enrolment which was rolled out in October 2012 is the biggest ever change in workplace pensions. Every employer is now responsible for enrolling employees into an eligible pension scheme, and will have to contribute to that scheme on behalf of their employees.
Who does it apply to? – Not all employees are eligible. Employees have to be at least 22, below the current state pension age and earn over £10k per annum, however, employers must allow other employees to ‘opt-in’ if they wish to do so, or to ‘opt-out’.
What does an employer need to do? – Employers must know their staging date, ensure the most appropriate pension scheme is in place and implement relevant systems. Not only this, but a ‘capacity crunch is looming’. It is predicted that the number of firms reaching their staging date will increase from over 44k in 2015, to 850k in 2017.
Where do I begin? – Planning ahead will be vital, the larger pension providers are already ‘cherry picking’ customers and resources of other firms may be limited. This could lead to a lack of choice in pension schemes and a lengthy lead time for set-up. Ideally seek specialist advice to ensure you are on the most cost- effective scheme long term.
Clarke Nicklin financial planning is a trading name of CNFP LLP, CNFP LLP is a Ltd Liability Partnership registered in England and Wales No.OC324909. CNFP LLP is an appointed representative of Lighthouse Advisory Services Ltd which is authorised and regulated by the FCA.
0161 495 4700 autoenrolment@cnfp.co.uk www.cnfp.co.uk
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