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What is Auto Enrolment?

Posted: 26 November 2014

Auto Enrolment

‘Auto enrolment’

A new law means that every employer must automatically enrol workers into a workplace pension scheme if they:

  • are aged between 22 and State Pension age
  • earn more than £10,000 a year
  • work in the UK

This is called ‘automatic enrolment’.

What is a 'staging date'?

Every employer will have a date from when the automatic enrolment duties come into force for their business. This is called an employer’s ‘staging date’. Automatic enrolment is being staged in over a period of six years, which started with the largest employers in 2012.

Staging dates are based on the size of an employer’s PAYE scheme on 1 April 2012 – the more people in the PAYE scheme at that time, the earlier the staging date. If you use more than one PAYE scheme, your staging date is based on the total number of people in the largest one that you use.

Staging dates were determined based on the latest PAYE scheme information from HMRC held by us at 1 April 2012.

Auto Enrolment isn’t as straightforward as everyone thinks it is. The statistics are proving this.  It’s so much more than just having a pension in place too. In fact choosing a qualifying pension scheme is just 1 of 33 tasks. It takes about 108 full working days to prepare for auto enrolment and up to 3 full days a month ongoing. Most small firms don't have the resources to pay for someone to advise them or the time to learn everything they need to know.

Judging by the fact The Pension's Regulator have investigated 900 employers and found 58% of these contained breaches and 163 actions have been taken including fines, I would argue that employers need all the help they can get.

 

For more information on auto enrolment, contact Louise.

Categories for this article

  • PAYE
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