Automatic enrolment to see millions more placed into workplace pension schemes

Small and micro-sized firms begin process of offering workplace pensions.

Over 47,000 large and medium-sized companies have already completed the step of automatically enrolling their employees into a workplace pension scheme. It is now the turn of the 1.3 million small and micro companies that will have to undergo the process of offering their staff a workplace pension between now and 2018.

The process started last month for these companies, with small and micro-sized firms with staff between one and 49 beginning to automatically enrol their employees into a workplace pension. Up to 9 million workers will be saving into the scheme by the time process concludes in 2018.

The Pensions Act 2008 introduced the new rules for workplace pensions in the UK. These changes affect every workplace and provide every worker with the opportunity to save for their retirement. Most workers within the UK are going to be automatically enrolled into a workplace pension scheme. The employee will, from the date they are automatically enrolled on, have the option to ‘opt out’. If they do nothing, they will be enrolled onto the scheme.

Under automatic enrolment, those employers and employees aged at least 22 years old and under state pension age, earning over £10,000 a year, make regular contributions to a workplace pension scheme. The Government also makes a contribution by means of tax-break.

The scheme is part of the government’s long-term economic plan to help working people save into a pension so that they may enjoy more security and independence in their retirement.

The process of enrolling workers began with the UK’s largest businesses in 2012, and then progressed to medium sized firms.

Dr Ros Altmann, Minister of State for Pensions, said: “With more than 5 million people automatically enrolled into a workplace pension, we have made great strides forward in a short space of time, but there is still much hard work to do.

“The switch to small and micro firms brings with it new challenges, which is why we’re working closely with business organisations and others to ensure they have the right level of support at every step of the way to help them through the process.

“Our long-term economic plan gives working people the chance to get on at every stage of their lives. This includes the dignity of a job, the security of a paycheque and a decent, well-earned retirement.”

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