Important Pension Changes

The government is very worried about people of working age not having a pension so from April 2015 it is introducing an Automatic Enrolment scheme. Basically anyone who is over 22 years old and earns above the tax threshold will automatically be enrolled into a pension scheme. You need to contact your payroll provider to find out the exact date when this will affect you. From this date you have 3 months to act

The government websitehas more details

there is a guide for care and support staff too

but some of the key points are:

• Regardless of whether workers are employed short term, as bank staff, permanent contracts or not, if they meet the criteria for joining a scheme (i.e. between 22 and state pension age; earn at least £10,000 p/a in 2014/15 (£833 p/mth) and work in the UK they should be auto-enrolled unless of course they opt out.

• If the worker earns less than the lower level of qualifying earnings (£5,772 p/a), and chooses to join a scheme (not necessarily a qualifying scheme), the employer does not need to contribute. However, you need to be aware of your contract of employment, if you have offered an employer pension contribution with the post, you cannot refuse to pay it!

• If the worker earns between £5,772 – £10,000 and chooses to join a qualifying scheme, you must as an employer contribute as well as the employee

• Employer and employee contributions  will scale up from 1% employer, 2% employee over the next 3 years.Once we reach 2018, any new members will contribute the full 8% (being Employee 5% and Employer 3%) BUT by the time we get there, contributions are expected to have increased so watch out for the Chancellor’s Budget Announcements!