Workplace pensions and your obligations

Workplace pensions and your obligations

Setting up your own business can be tough, when you start out by yourself things are pretty simple. There’s just one person to pay which can usually be done via self-assessment. As your business grows and you need to take on staff to help, things can start getting complicated. You need to be on top of your workplace pension to ensure you are meeting your obligations.

In 2012, the government launched auto-enrolment to ensure everyone has a workplace pension. Once an employee meets certain requirements (see below) they will automatically be enrolled into a workplace pension scheme. This will enable more people to save towards their retirement.

Which employees need to enrol?

There are some requirements for employees to join auto-enrolment, these include earning over £10,000 pa, being over 22 years old, working in the UK and not already taking part in a suitable workplace pension scheme. Employees are also covered if they are employed on a short-term contract, or they are away on maternity, adoption or carer’s leave.

Contributions

The minimum amounts which need to be paid into a workplace pension are 5% by your employee and 3% by the employer. Employees can opt out once they have been enrolled but they will then lose out on their employers’ contributions.

As an employer you must meet the legal obligations of setting up auto-enrolment for any staff that you recruit into your business. If you do not comply, then your business could face a penalty. The obligations begin as soon as you recruit one member of staff who meet the requirements above.

At Clear Vision Financial Management, we specialise in providing an outsourced finance function. We love becoming an integrated part of your business and you will benefit from the experience of a wide team from Finance Director level through to Bookkeeper. Find out more about our outsourced Finance department.

If you would like a chat about how we can help you with our outsourced finance department, please get in touch with the friendly Clear Vision Financial Management team. You can call us on 01794 330025 or email us