Auto-enrolment pension services

MyTaxDoc Auto Enrolment Support & Guidance

Although spending all your money on a luxurious yacht might be tempting, it’s vital to plan for the future. This includes ensuring you have adequate financial resources for retirement, beyond the possibility of relaxing on a yacht. To address this, workplace pensions and Auto Enrolment were introduced to provide basic financial coverage for later in life.

What is Auto Enrolment?

The UK government introduced Auto Enrolment to make it mandatory for all British employers to set up a savings plan for their qualifying employees. To qualify for Auto Enrolment

✓ Employees must be aged between 22 and State Pension age,

✓  Earn more than £10,000 a year,

✓ work in the UK.

Under this scheme, both employers and employees contribute a certain percentage of the employee’s salary each month into a pension pot that can only be accessed at retirement age.

Can I “Opt Out” of Auto Enrolment?

While employees have the option to “Opt Out” of Auto Enrolment, initially everyone is automatically enrolled. It’s important to note that opting out means missing out on valuable employer contributions and potential investment returns over the long term.

When did Auto Enrolment begin?

Originally introduced under the Pensions Act 2008, Auto Enrolment began taking place within larger organisations in 2012. There were various phased staging dates, with all workers being automatically enrolled in an employer workplace pensions by February 2018.

How much is Auto Enrolment?

As of April 2020, employees must contribute a minimum of 5% into their pension pot with employers paying in at least 3%, total contributions must be 8%.

What if I haven’t got a pension scheme set up?

If you haven’t set up a pension scheme, you can use NEST for free. Alternatively, speak to your accountant or financial advisor to help you choose a scheme that’s set up for Auto Enrolment.

What is the earnings threshold for pension Auto Enrolment?

For the 2020-2021 tax year, the earnings threshold for pension Auto Enrolment is more than £6,240 annually, £520 monthly, or, £120 weekly but no more than £10,000 per year.

How do I calculate Auto Enrolment pension contributions?

Calculating Auto Enrolment pension contributions is based on the employee’s pensionable earnings. You can ask your accountant to do it for you as there can be some variables to consider.

What is a ‘staging date?’

Your “staging date” is the date when your Auto Enrolment responsibilities begin. You should start preparing for this 6 months in advance

What if I miss the staging date for auto enrolment?

If you miss your staging date, you may be liable for penalties from The Pensions Regulator for non-compliance. If you’re within 6 weeks of your staging date, you can postpone Auto Enrolment, but you must inform your employees in writing. If you miss this 6-week window, you must backdate Auto Enrolment. If you need help with compliance, talk to us as we have the experience to sort it out.

Talk to MyTaxDoc for Auto Enrolment advice

Auto Enrolment pension services are required by law, so there’s no sneaking out of this one, but the good news is that there’s plenty of support and guidance available.

If you’re remotely concerned about setting up a pension pot for your employees or want to check the correct contributions are being deducted, contact us here or call 0800 009 6441