Work Place Pensions Auto Enrolment

Auto-enrolment is a government initiative that requires all employers in the UK to provide a workplace pension scheme for their eligible employees and contribute to their pension savings. 

The aim of auto-enrolment is to help more people save for their retirement and reduce the reliance on the state pension.

Employees are eligible for auto-enrolment if they meet all of the following criteria:

Employees who do not meet these criteria can still join their employer’s pension scheme if they want to, but their employer may not have to contribute to their pension.

They  are  aged  between  22  and  state  pension  age  (currently  66,  though  increasing  to  67  and eventually  68)
They  earn  more  than  £10,000  a  year  from  one  job
They  normally  work  in  the  UK

How does auto-enrolment work?

Employers must automatically enrol their eligible employees into a workplace pension scheme and make contributions to their pension. Employees can choose to opt out of the scheme if they wish, but they will lose out on the employer’s contributions and tax relief.

The minimum contribution rates for auto-enrolment are set by the government and increase over time.

In 2023/24 tax year, the total minimum contribution is 8% of the employee’s qualifying earnings, of which at least 3% must come from the employer and 4% from the employee. The remaining 1% is tax relief from the government.
Qualifying earnings are the employee’s earnings between £6,240 and £50,270 a year (in the 2023/24 tax year). This includes salary, wages, bonuses, overtime, commission, statutory sick pay, statutory maternity pay, statutory paternity pay, and statutory adoption pay.

How can we help you with auto-enrolment?

At tba Wealth Management, we are experts in providing bespoke pension solutions for businesses of all sizes and sectors. We can help you with every aspect of auto-enrolment, from choosing the right pension scheme for your business and your employees, to managing your payroll and compliance processes.

We can also offer you ongoing support and advice on how to maximise your pension benefits and minimise your costs. Whether you are new to auto-enrolment or looking to review your existing arrangements, we can help you find the best solution for your needs.
Contact us today for a free consultation and quote. 

Why is it important to stay compliant with auto-enrolment requirements?

Employers have a legal duty to comply with the auto-enrolment requirements and provide a suitable workplace pension scheme for their employees. If they fail to do so, they could face enforcement action from The Pensions Regulator, which could include:

  • Warning letters and statutory notices 
  • Compliance notices and improvement notices 
  • Penalty notices and escalating penalty notices 
  • Court orders and injunctions 
  • Civil penalties and criminal prosecutions 

The penalties for non-compliance can be severe and costly. For example, an escalating penalty notice can range from £50 to £10,000 per day, depending on the size of the employer. 

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Therefore, it is vital that employers understand their obligations and responsibilities under the auto-enrolment legislation and take the necessary steps to fulfil them. This includes:

  • Assessing their workforce and identifying who is eligible for auto-enrolment 
  • Choosing a suitable workplace pension scheme that meets the quality standards 
  • Communicating with their employees about auto-enrolment and their rights and options 
  • Enrolling their eligible employees into the pension scheme and making contributions on time 
  • Keeping accurate records of their auto-enrolment activities and payments 
  • Re-enrolling any employees who have opted out every three years 
  • Completing a declaration of compliance with The Pensions Regulator 

We can assist you and your business with all of the above points to save you time and stress of getting it wrong. Get in touch today to see how one of our bespoke pension solutions can benefit your business. 

We always offer the first meeting free with no obligations to commit