Automatic Enrolment – what is it and how does it affect me?
What’s it all about?
You may be aware that as of the 1st January 2014 the government has called for all workers to be auto enrolled into a pension scheme, which your employer will also pay into. This affects you if you;
-aren’t already in a workplace pension scheme-are aged between 22 and State Pension age
-earn more than £9,440 a year-work in the UK
The scheme will work by a percentage of your pay automatically going into your pension fund, and (in most cases) your employer and the government will also add money for you. Currently at Essential, we are paying our workforce 1%, and they will also pay 1%. From 2017 this will raise to 2% and 3% respectively, and then 3% and 5% from 2018.
You will also receive a little extra from the taxman, as the contributions will be taken before tax is. This means that for every £10 you contribute, you are only losing £8 (on a tax rate of 20% – the higher the rate, the less it will cost!)
You will be able to claim back this money until you’re at least 55 (unless you’re seriously ill), along with the state pension.
Does this apply to me?
Currently, the scheme only applies to those who;
-Are not already in a qualifying pension scheme
-Are aged 22 or over and under State Pension Age
-Earn more than £182* gross in the week you are assessed
-PAYE (weekly or monthly)
-Work (or usually work) in the UK.
New workers will be enrolled after a three month postponement period if they meet the above criteria.
I don’t want to be enrolled! What do I do?
You will receive communications from your employer and/or pensions provider informing you that you have been added into the scheme. You will then have a month to inform the pension provider that you wish to opt-out, and you will receive any money back that you have paid in. If you do not do this, the money will most likely remain in your pension until you retire.
I’m working as a temp for Essential, how am I affected?
We have teamed up with ‘NOW’ Pensions to help you provide for your future. Our current workforce will have been informed via either email or post. For more information, please click the links below.
Essential Recruitment is a Recruitment Agency specialising in the supply of temporary and permanent staff to Industry and Commerce sectors. Visit Essential Recruitment’s website to find out how our staffing solutions can help you.