We are receiving a lot of enquiries from new businesses and employees about auto enrolment pensions, so for those of you who aren’t sure whether this impacts you, your business, or your employees we have prepared the below guide:
For automatic enrolment, employees fall into three categories depending on age and salary. Employees who already belong to a qualifying workplace pension scheme are not eligible for automatic enrolment.
Here’s a table to show which category you could fall into:
| EARNINGS | AGE | ||
| 16 – 21 | 22 – State pension age | State pension age – 74 | |
| Less than or equal to £5,876 | Entitled worker | ||
| Over £5,876 and up to £10,000 | Non-eligible jobholder | ||
| £10,000+ | Non-eligible jobholder | Eligible jobholder | Non-eligible jobholder |
So, what do these terms actually mean??
Eligible jobholder
Eligible jobholders will be automatically enrolled into their workplace pension scheme.
If you choose to remain in the scheme, you will benefit from contributions from your employer. You will both need to meet the minimum contribution levels.
If you’ve previously opted out of the scheme, you will be re-enrolled again every three years if you are still eligible.
Non-eligible jobholder
Non-eligible jobholders will not be automatically enrolled into their workplace pension scheme but can ask to join.
If you opt to join the scheme, you will benefit from contributions to your pension from your employer. You will both need to make minimum contributions.
Entitled workers
Entitled workers will not be automatically enrolled into their workplace pension scheme but can apply to join a company pension scheme.
Your employer will contact you to give you the opportunity to join a pension scheme but is not obliged to contribute on your behalf.
If you do have any further questions about auto-enrolment or payroll and pensions in general, please do drop us a line or give us a call and one of the team will be happy to help.
0161 456 9666 / askus@in-accountancy.co.uk
