What is pension auto-enrolment? What are the contributions, can I opt out and does my employer pay in?
The Government initiative aims to make sure every worker has saved up for their retirement by forcing employers to offer the scheme
THE introduction of compulsory retirement saving for employees has been up and running for a few years now.
All staff aged between 22 and state pension age earning more than £10,000 are automatically enrolled into a pension scheme. Get the important info on the scheme here...
What is pension auto-enrolment?
Automatic enrolment is a Government scheme to help more people save for later life through a pension scheme at work.
In the past, some workers missed out on having one and were forced to rely on the meagre state pension.
Automatic enrolment aims to changes this.
Now employers are being forced to sign up their eligible workers into a pension scheme.
Firms and organisation must also pay money into the scheme.
What are the contributions?
The employer must also pay money into the scheme as well as the employee.
The minimum contribution is 2 per cent with at least 1 per cent coming from staff.
From April 6 2018, minimum contribution rates rise to a combined 5 per cent, with a minimum of 2 per cent from the employer and the remaining 3 per cent from workers.
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Does my employer have to pay into it and can I opt out?
Yes the employer has to pay if their employee is paying.
Where a member of staff is due to be automatically enrolled but doesn’t want to contribute they can opt out of the scheme.
Meanwhile, the employer no longer needs to make contributions for workers who opt out.
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