When you set up an auto-enrolment Pension Scheme:
As an employer, you’re obliged to enrol all employees in a workplace pension scheme unless they are already an active member of a Qualifying Scheme.
A Qualifying Scheme is either a personal pension scheme or an occupational pension scheme that meets the charges cap of 0.75% pa for all charges (including the costs of a stated default investment fund), and into which the level of contributions are being paid.
The basics
All employers must auto enrol employees who are:
You can delay auto-enrolment of new employees for up to three months from the date they join. This also applies to employees whose income is initially below the earnings trigger, but subsequently exceeds it.
The scheme must satisfy a minimum contribution test. This is based on a band of earnings falling between £6,240 and £50,270 pa in 2024/25. It’s made up of an employer’s contribution of at least 3% and a personal contribution of 5%.
Alternative minimum contribution levels apply to schemes where you use a different definition of earnings, known as pensionable salary (rather than qualifying earnings). These will depend on the 'tier' (or 'set') that is used.
You also have an ongoing duty to maintain qualifying pension provision for employees who are already members of a Qualifying Scheme or become members of such schemes.
National Workplace Pension Schemes
As well as the traditional schemes, a number of providers have developed Qualifying Scheme solutions that are aimed at low to moderate earners and their employers. These are:
The value of a pension will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you initially invested.
Auto-Enrolment products are not regulated by the Financial Conduct Authority.
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