Auto Enrolment

Most workers in the UK are going to be automatically enrolled into a workplace pension scheme by their employer. From the date they’re automatically enrolled they’ll have a month to choose not to join, or ‘opt out’. If they do nothing they’ll be enrolled in the scheme. They’ll make contributions to their retirement pot from their pay for as long as they’re employed or until they take their money out.

Workers and employers can both contribute into a working pension scheme to build a retirement pot that’s invested on behalf of the worker. Workers who earn over a certain amount are entitled to a minimum contribution into their pot when they’re paid.

Automatic enrolment is being phased in, starting with the largest UK employers. So if you’re eligible (see below) and haven’t yet been enrolled into your workplace scheme, you should be by 1 February 2018, at the latest.

The Law

  • Automatic enrolment makes it compulsory for employers to offer eligible workers a workplace pension
  • The employer must automatically enrol every eligible worker into the scheme
  • The employer must make a minimum contribution to the scheme
  • You will receive tax relief on your contributions - but you’re free to leave the scheme at any time
  • The earlier you start saving into a pension, the better it is
  • Employer contributions and tax relief make pensions an attractive option for saving for your retirement

Auto Enrolment Qualification

Countess & Co are able to offer advice on all aspects of auto-enrolment and pension treatment

Eligible Jobholder
Eligible JobholderEarns 10,000 +
Eligible JobholderEarns 10,000 +
Age 22 to State Pension Age - Must be Automatically Enrolled - Entitled to Employer Contributions
Non Eligible Jobholder
Non Eligible JobholderEarns 5,876 - 10,000
Non Eligible JobholderEarns 5,876 - 10,000
Age 22 to State Pension Age - Can ask to be Enrolled - Entitled to Employer Contributions
No Qualifying Earnings
No Qualifying EarningsEarns up to 5,876
No Qualifying EarningsEarns up to 5,876
Age 22 to State Pension Age - Can ask to be Enrolled - Not Entitled to Employer Contribution
Non Eligible Jobholder
Non Eligible JobholderEarns over 5,876
Non Eligible JobholderEarns over 5,876
Below 22 or over State Pension Age - Can Ask to be Enrolled - Entitled to Employer Contributions
No Qualifying Earnings
No Qualifying EarningsEarns up to 5,876
No Qualifying EarningsEarns up to 5,876
Below 22 or over State Pension Age - Can ask to be Enrolled - Not Entitled to Employer Contributions
Based on the 2017/2018 Auto Enrolment and Qualifying Earnings Levels. These figures are reviewed annually by the government and change each year.

How minimum contributions are worked out

The minimum contribution is made up of money from a worker’s pay, money from their employer and tax relief from the government.

Employers can choose a more straightforward way of calculating their minimum contributions if they want to make things simpler. As long as the contribution is at least as much as the minimum, then employers will still be complying with their new duties.

The new employer duties are being introduced gradually. The minimum contribution has been introduced at 2 per cent of a worker's pay. This will rise gradually to 8 per cent. The dates for the increases to 5 per cent and 8 per cent are April 2018 and April 2019 (as illustrated in the chart).
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