Everything you need to know about auto enrolment for pensions
The staging process for auto-enrolment, the Government initiative to ensure every employee is saving for their retirement, has begun for businesses large and small across the UK. If your small business hasn’t thought about auto-enrolment yet, or maybe you weren’t even aware of it, then now is the time to start acting.
What is auto-enrolment?
Auto-enrolment, short for automatic enrolment, is part of the Workplace Pension Reform. The Reform, first introduced in 2012, means every business in the UK must enrol their workers into a Workplace Pension Scheme by 2018 if the following applies:
- They earn over £10,000 a year, for the 2015-16 tax year
- They are aged between 22 years old and the state pension age
The Reform is being introduced in stages up until the deadline date of 2018, starting with the largest employers, then medium-sized and finally small employers. Your staging date is all dependant on the size of your business.
Who is eligible?
As an employer you’ll need to be clear on which of your team members are eligible. Auto-enrolment applies to all full and part-time employees who are earning over £10,000 per year on your payroll.
If you already have a pension scheme in place you will need to check it complies with the Workplace Pension Scheme.
What auto-enrolment means for your business?
There are a few preparations your small business will need to do to make for auto-enrolment. A good place to start is finding out what your staging date is – this is the date that your automatic enrolment duties are due to start. Once you know your date you can work backwards and start preparing your business. You can use the Pensions Regulator Staging Date Calculator to work out your date.
If you don’t already have a suitable Workplace Pension Scheme in place you’ll need to find one – find a Workplace Pension Scheme provider here. Then it’s up to you to enrol your eligible employees and communicate the changes to them in writing.
Rolling out auto-enrolment
Luckily there are plenty of accountancy software platforms out there with the facilities to help small businesses roll out these auto-enrolment changes. Many online accounting platforms have already released their updates to support business owners with the changes – Xero and FreeAgent both offer an auto-enrolment facility.
Request advice from an auto enrolment expert
If you’re struggling to understand the changes to pensions requirements or would like help rolling out these changes in your small business, speak to the experts At Approved Accounting in Havant today. Call us now for a free, no obligation chat on 01730 823 000, email us or Skype us.