Pensions are long term investments. You may get back less than you originally paid in because your capital is not guaranteed and charges may apply.
Pensions are long term investments. You may get back less than you originally paid in because your capital is not guaranteed and charges may apply.
Following the roll out of auto-enrolment, which began in 2012, all new employers must now set up a workplace pension and automatically enroll their eligible employees. Here is what this means for your business.
Employers will also need to contribute to their employees’ pensions to help them save for retirement.
For pension purposes, you count as an employer if you deduct tax and national insurance from your workers’ salaries.
There are a lot of obligations and duties for you to manage and it can be complicated for smaller businesses without a dedicated HR department.
Thankfully, there’s plenty of information available about your responsibilities on the government website. The Pensions Regulator also has a handy tool that will let you know what you need to do and when.
Make the most of your tax-free ISA allowance.
Under auto-enrolment rules employers must pay 3% of their staff’s qualifying earnings into their pension. You can pay more - for example agree to match their contributions - if you want to boost your employees’ remuneration packages.
1. Choose your pension provider
As a first step you need to choose a company to provide your workplace pension.
There are a number of companies that specialise in the provision of workplace pensions - many of which will be very helpful when it comes to setting up your scheme.
A defined contribution pension is usually the most cost-effective option. Although defined benefit pensions have long been regarded as the gold standard, they are incredibly expensive for businesses to maintain.
If you have not already chosen your pension provider, find out how to choose the right one for you. Remember to find out whether non-eligible jobholders or entitled workers can opt into the scheme.
2. Assess your workforce
Next you need to think about who will be eligible for the scheme.
You need to have a workplace pension as soon as your first member of staff starts work. This is your ‘duties start date’.
All eligible employees need to be automatically signed up to your pension. However, while all employees may be able to pay in if they wish, you only need to auto-enrol those that meet certain criteria.
Find the best personal pension plan to make your money work as hard as it can.