Okay, there is so much hype around the new Government pension scheme but it’s mainly focused on business owners and not employees. The new rules are for your benefit. Whether you agree with that statement or not, the reason the new rules have been brought in are to support working people like you – to provide an income for your retirement.
If you are aged over 22 (and under the state pension age) and earning over £10K a year you will be automatically enrolled into a pension when your company reaches it’s staging date (the date which they have to have everything in place by or face huge fines). You will make contributions to your pension each month and your company will make contributions too. To find out whether you will be automatically enrolled and what your contributions are likely to be you can use our Employee Contribution Calculator tool. You can also read more about contributions here.
If you are not automatically enrolled you will be invited to join the company pension and you can choose whether you opt in or not. If you earn over £6,032 per year, your company will make contributions too. If you earn less than £6,032 per year and you opt in to the company pension, your company doesn’t have to make contributions – although they may choose to.
If you do not meet the criteria for automatic enrolment straight away be aware that you may become eligible at a later stage (if you have a birthday or get a pay increase). You will be assessed every month once the scheme is in place and if you later meet the criteria you will become eligible for automatic enrolment.
If you want to opt out of the workplace pension, you need to do so directly with the pension company who the pension is set up with, it’s not sufficient to just inform your boss. Find out more about opting out here.
If you choose to opt out or simply do not want to opt in when invited, you will be re-assessed every three years and if you meet the criteria for auto enrolment when you are re-assessed, you will be automatically enrolled again or at that point.