Workplace Pension (Auto Enrolment)
Auto-enrolment is a departure from the way workplace pension schemes traditionally worked. Previously, the onus was on you to join your employer’s pension scheme if you wanted to. Now, under auto-enrolment, employees are automatically put into their workplace pension scheme – though they can still choose to opt out.
The aim of defaulting people into their workplace pension is to increase the proportion of employees saving for retirement.
The Government is considering ways to get more people into auto-enrolment including lowering the qualifying age to 18, starting contributions from the first £1 earned and bringing the self-employed into auto-enrolment. Currently, enrolment is automatic for people aged 22 or over earning a minimum of £10,000 from a single job.
Automatic pension benefits for the employed
In the past, many workers missed out on valuable pension benefits, because their employer didn’t offer them a pension or they didn’t apply to join their company’s pension scheme.
Automatic enrolment changed this. It makes it compulsory for employers to automatically enrol their eligible workers into a pension scheme. The employer must also pay money into the scheme.
Automatic enrolment was phased in from 2012, starting with the largest UK employers. All eligible workers should have been automatically enrolled in their employer’s workplace pension scheme by 1 February 2018.