Starting from October 2012, employers will enrol workers into a workplace pension, if they meet the criteria below. When employees pay into a pension, their employer and the government will contribute too. A workplace pension is a way of saving for your retirement arranged through your employer.
How this affects employees
Your employer will enrol you into a workplace pension if you:
- are not already in a pension at work
- are aged 22 or over
- are under State Pension age
- earn more than £8,105.00 a year
- work in the UK
You can choose to opt out of this pension, if you want to. But if you stay in you’ll have your own pension, which you get when you retire.
If you’re already in a pension at work and it meets the government’s new standards, this will not affect you.
When will Employer’s be obliged to start the scheme?
It is only large employers that have over 120,000 employees that have to start their scheme in October 2011. To find the date your employer will have to start a scheme, click here. Employers with less than 30 employees don’t have to start until between June 2015 and April 2017, depending on their PAYE reference.
This will probably go the same way as stakeholder pensions. There is an opt-out and there seems to be more preparation being made for this than the other way around.