Auto Enrolment in Workplace Pensions
Auto Enrolment in Workplace Pensions
Every employer in the UK is required by law to provide a workplace pension and to enrol all of their employees automatically.
Under the Pensions Act of 2008, the government launched the Auto Enrolment programme in an attempt to combat the issue of a large percentage of British workers failing to save enough for retirement. The objective of auto-enrolment is to make sure that more employees may easily participate in a workplace pension plan, allowing them to accumulate savings for their retirement and receive income in addition to their state pension.
Eligibility for Auto enrolment
Employees must be automatically enrolled in their workplace pension scheme if they:
- Work in UK
- Minimum 22 years old
- Under the State Pension age
- Earn more than £10,000 per year
- Are not already a member of a qualifying workplace pension scheme
Opting out of a work place pension
You will have one month from the date of your automatic enrolment to “opt out”; any contributions you make during this time should be reimbursed. The contributions you have previously paid will typically have to stay in your pension pot if you decide to opt out after a month. It makes sense to act as soon as possible if you decide to opt out. You can request to re-join the programme after opting out, but your company might only permit you to do so once every 12 months.
Your firm will normally re-enrol you in a scheme every three years, even if you do not request to re-join. It’s known as re-enrolment.
Note that your employer cannot
- Force or motivate you to opt out from the scheme
- Discriminate or unfairly sack you for continuing to participate in a company pension plan
- suggesting that opting out of the pension plan increases a person’s chances of getting an employment
for further information about Workplace Pension please visit DWP –
What happens to your pension if you leave employment?
When you change job, your old pension provider should have written to you to explain your options under the scheme.
If they haven’t and you have their details, contact them and request them to write your options.
you’ll often have two options:
- Leave the pension where it is. It will continue to be invested and hopefully grow over time. You can decide how to use it later. You might even be able to continue to contribute to it if you want.
- You can move the money to your new pension provider, called transferring your workplace pension. This can make it easier to keep track of and manage your pensions. It might even save you costs too, as you won’t be paying each provider separately.
Combining the auto-enrolled pensions you previously held
Transferring your pensions into one pot can offer better value for your money and giving you more control and insight over your retirement savings
Make sure you won’t lose any guaranteed benefits or incur an expensive exit fee when transferring an Auto Enrolment pension.
Unbiased Independent Financial Advisers can assist you in consolidating all of your previous pensions into a single manageable pot, as opposed to having multiple pensions dispersed throughout your career.
The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.
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