What is auto enrolment?
Auto enrolment effectively reverses the decision most people make about joining a workplace pension scheme. Until its introduction, workers joined a workplace pension scheme, if their employer had one, on a voluntary basis – but auto enrolment changed that. The Pensions Act 2008 means that ‘qualifying workers’ are now automatically enrolled into a pension scheme and have to opt out if, for any reason, they’d prefer not to be in one. By making membership of a pension scheme the ‘default’ position, millions of workers will have an opportunity to help themselves to a better retirement and reduce their reliance on the state.
As we all know, life expectancy in the UK is steadily increasing. Advances in medical care, better working conditions, health and lifestyle education and a lack of major conflicts have all played a part. Studies by the ONS (Office of National Statistics) predict that average life expectancy will increase by 6.2 years for men (from 79.5 to 85.7) and 4.3 years for women (from 83.3 to 87.6) by 2030.
Living longer has a knock-on effect on pensions. If we live longer, our retirement is also going to be longer, and if our retirement is longer, we’re going to need a pension for longer. Despite this, most of the population is making little, if any, provision for retirement; the constant drain on our finances throughout adult life sometimes making it a struggle just to ‘get by’, let alone put money aside for the future.
Far too many people are relying on the state to see them through retirement. Despite a change in the system (for those reaching their State Pension age after 6 April 2016), the full, ‘new’ State Pension, of £221.20 per week / £11,541.90 per year (tax year 2024-25), is widely accepted as being insufficient for most people to live on. Not only that, a longer period of retirement means that the State Pension will have to be paid for longer, the ONS predicting that the cost of providing it will steadily rise from £94billion in 2012-13 to £167billion in 2032-33.
Auto enrolment forces a major upheaval to how pensions are offered, by who and who to. Legislation now requires every employer, no matter what their size, to enrol every qualifying worker into a workplace pension scheme and then make regular contributions to the scheme.
How can One Financial Solutions help you?
One Financial Solutions is here to help you. We can help you plan and implement everything necessary to ensure you comply with the new legislation and fulfil your legal obligations.
If you already have a workplace pension scheme, we’ll review it to make sure it can be used and will recommend any changes that may be needed. If you need a new scheme, we’ll find one for you and, as a truly independent firm of financial advisers, we’ll make sure the scheme we recommend is selected from the entire market and is the one that is best for both you and your staff.
More than that, if you’d like us to administer the entire scheme for you, we can do that too.
So, if you’re looking for specific help about auto enrolment or just want advice on the subject, please call us on 020 3714 9565 or ask us to call you by sending an email to email@example.com.