By April 2017 every person who currently has employees in the UK will need to have an Automatic Enrolment (AE) scheme in place but concerns are being raised that insufficient pension savings are being put into the schemes.
93% of people have a mobile phone; 77% of people have a Facebook account but less than 50% of people have a pension! We have an ageing workforce where 2500 people retire in the UK every day and 1 in 6 people will reach their 100th birthday; savings in the UK are at their lowest for over 40 years; so what effect might that have as things stand today? 80% of people in the UK will get less than £5,000 per year from their pensions’ scheme!
A partner from Hallidays commented:
“The Government has foreseen a funding problem and this has led to the big pension shake up which affects everyone. By April 2017 every person who currently has employees in the UK will need to have an Automatic Enrolment (AE) scheme in place.
“The pensions regulator has issued guidance on the steps you should take to achieve AE and in summary essentially tells you to: Know what you have to do and review scheme for compliance in plenty of time and in advance of your staging date because you will need to find out if your pension scheme is one that the Pensions Administrator will accept; assess and inform your employees and to enrol and administer the scheme. But be warned – it’s not an easy task”.
Employers’ duties for Auto Enrolment can be onerous as they are required to re-register the pension scheme every 3 years; keep details of all pension arrangements for 6 years and keep specific records for each jobholder for 6 years. Equally importantly, employers cannot promote opting out and penalties for non-compliance are unforgiving – up to £2500 per day.
Valerie Wain continues:
“The larger providers are warning that they may have to close their doors due to demand as the deadline gets closer - you will then be required to register with the Government scheme, NEST, which is more restrictive than most other pensions schemes and the fees are significantly higher i.e. 2% compared to 0.8%.
“The message to you is simple. If you want help with automatic enrolment and choosing a pension scheme that best suits you and your team, you need to take action now. If you don’t, there could be no-one left to help you and you could end up with a pension scheme that isn’t suitable for you or them”.
Let us offer you a helping hand with Auto Enrolment at our upcoming event on the 11th March, where we will address the implications to you and your business for pensions, payroll, and HR. Book your place here