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Auto Enrolment Pension Services

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Auto Enrolment Pension Services
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    Smooth Auto Enrolment Support & Guidance

    Whilst it’s tempting to blow all your money on a yacht and throw caution to the wind (be honest, we’ve all thought about it) it’s incredibly important to plan for the future. When it comes to retirement, maybe you will be sunning yourself on a yacht, but it’s also important to make sure you’re financially covered for the basics that you’ll need later in life. That’s why workplace pensions and Auto Enrolment were introduced.

    What is Auto Enrolment?

    Auto Enrolment was implemented by the government to make it mandatory for all British employers to create a savings plan for their employees. Qualifying employees are:

    • Aged between 22 and State Pension age
    • Earn more than £10,000 a year
    • Work in the UK

    Both employers and employees will contribute a certain percentage each month that goes directly into a pension pot that cannot be accessed until retirement age.

    Can I “Opt Out” of Auto Enrolment?

    There is the option to “Opt Out” if an employee does not wish to contribute towards their pension, but to begin with everyone is automatically enrolled.

    When did Auto Enrolment begin?

    Originally introduced under the Pensions Act 2008, Auto Enrolment began taking place within larger organisations in 2012. There were various phased staging dates, with all workers being automatically enrolled in an employer workplace pensions by February 2018.

    How much is Auto Enrolment?

    As of April 2020, employees must contribute a minimum of 5% into their pension pot with employers paying in at least 3%, total contributions must be 8%.

    What if I haven’t got a pension scheme set up?

    That’s ok, the government thought about that. NEST (National Employment Savings Trust) is a public service scheme that enables all employers to use their pension services, and it’s free.

    Alternatively, if you’d like help choosing a pension scheme that is set up for Auto Enrolment then it’s worth speaking to your accountant (flutters eyelashes) or speaking to a financial advisor.

    What is the earnings threshold for pension Auto Enrolment?

    For the 2020-2021 tax year, the earnings threshold for pension Auto Enrolment is more than £6,240 annually, £520 monthly, or, £120 weekly but no more than £10,000 per year.

    How do I calculate Auto Enrolment pension contributions?

    Ask us. Seriously, just ask us. Calculations are based on employee’s pensionable earnings. You’ll take the gross amount, deduct tax and National Insurance, and then remove pension contributions from the remaining net figure. However, there can be some variables to take into consideration, so you can always ask us to do it for you.

    What is a ‘staging date?’

    This is the date your auto enrolment responsibilities start, so you need to make sure you are ready for this. It is recommended by The Pensions Regulator that you start preparing 6 months in advance.

    What if I miss the staging date for auto enrolment?

    Well the bad news is you may well be liable to penalties from The Pensions Regulator for non-compliance, especially as they will have written to you 12 months ahead of your staging date.

    The good news is, if you’re within 6 weeks of your staging date you can postpone auto enrolment. You must write to all employees and explain this within that 6 week period or the postponement never happened. If you missed this 6 week gap, then you must backdate auto enrolment.

    Just speak to us, we have lots of experience in sorting out even the biggest of compliance headaches.

    Request a quote or ask for advice

    We work with a wide range of businesses on a national level and can give you the friendly and expert accounting advice you need.

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    Talk to Smooth Accounting for Auto Enrolment advice

    Auto Enrolment pension services are required by law, so there’s no sneaking out of this one, but the good news is that there’s plenty of support and guidance available. If you’re remotely concerned about setting up a pension pot for your employees or want to check the correct contributions are being deducted, contact us here or call 01329 889345.

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