Auto Enrolment.

AUTO ENROLMENT – HOW WILL IT AFFECT YOU?

Here’s some information you may find useful to prepare yourself for the changes taking effect in 2012.

WHAT IS AUTO ENROLMENT AND WHY IS IT HAPPENING?

Auto enrolment is where an eligible employee is automatically enrolled into their company pension. From October 2012 it will be a legal requirement for UK employers to do this.

Many people don’t currently save enough for retirement or take advantage of company pension schemes that may be offered to them. As a population we’re living longer and have an increasing proportion of people at retirement age compared to working age. Auto enrolment is part of a Government initiative to increase private retirement savings.

WHAT ARE THE PLANS?

Auto enrolment will begin in October 2012 and will be introduced in stages with larger employers starting first. By September 2016 all employers will be expected to auto enrol their eligible employees into a qualifying scheme.

WHAT DOES IT MEAN FOR ME?

From October 2012 to September 2016, depending on the size of your company, employers will have to auto enrol all eligible employees into a qualifying pension scheme.

Minimum contributions for employees and employers will be phased. By October 2017 onwards the minimum contribution will be 8%, of which at least 3% must come from the employer.

WHAT IS A QUALIFYING COMPANY SCHEME?

This scheme must meet certain minimum criteria in relation to contributions or benefits. It must be able to auto enrol employees. You should consult a financial adviser to find out what is the best scheme for your company.

WILL IT INCREASE COSTS?

If you already offer a suitable scheme then the costs will come from having to auto enrol members who are not currently members. Those employers without a qualifying scheme will have to set one up.

OUR SUPPORT TO YOU

We can help you identify whether your existing scheme will qualify or we can set up a new scheme to meet the auto enrolment criteria. Contact your financial adviser for further information.

All information is correct as at 27 October 2010 but is subject to change.