Auto enrolment Archives | Wellden Turnbull Accountants

UK’s smallest employees need to embrace auto-enrolment

September 24, 2015 Posted by Wellden User

A recent survey comissioned by the Chartered Institute of Payroll Professionals has found that more than a third of workers reaching the end of their working lives are not planning financially for their retirement.

At a time when auto-enrolment is very much at the forefront of SME owners’ minds, 36 per cent of individuals aged 51-60 admitted to having no pension provision. Meanwhile, two-thirds of 20-24 year-olds surveyed also confessed to having no pension plans, with 30 per cent of all survey respondents fearing that their final pension pot is unlikely to be enough to live on when they do come to retire.

Jane Watford, Payroll Manger said: “I would hope that most people are thinking about their future, but these results show that a great many towards the end of their working lives are not planning for their retirement.

“This should act as a wake-up call for SMEs to look at their automatic enrolment staging date and evaluate the role that payroll plays within their organisations. Auto-enrolment is here to stay and will not go away by ignoring it.

“Small employers should therefore be embracing auto-enrolment and promoting the virtues of it to their staff. After all, the survey revealed that 55 per cent of employees feel saving for the future through payroll is a good idea.”

If you’re confused about what the changes to The Pensions Regulator laws mean for your business, and you require assistance setting-up your automatic enrolment scheme, then please email our Payroll Manager, Jane Watford.

Should you require confidential advice on planning for your retirement, then we are also on-hand to help, so feel free to contact us today.

A growing number of SME’s to be affected by Auto-Enrolment

August 10, 2015 Posted by Wellden User

Recent data from The Pensions Regulator has revealed that approximately half a million more businesses will have to enrol than previously anticipated and will face higher employment bills as they set-up their pensions.

Apparently, around 1.8m small and micro employers will need to meet their pension duties over the next three years, compared to the previous estimate of 1.3m. Under the new regulations, employers must contribute at least one per cent of eligible employees’ qualifying earnings, rising to two per cent in October 2017 and then three per cent a year after that. However, these contributions are not subject to National Insurance (NI) and they can be offset against business profits for tax purposes.

In addition to the employer’s contribution employee’s will also be required to make contributions which many employee’s see as an extra deduction being made by their employer and it is essential that businesses communicate clearly and at an early stage with their employees to avoid any negative feelings.

But as well as the financial implications this will have for SMEs, businesses could be hit with further costs if they fail to comply with their duties as an employer. If a scheme has not been established by its staging date, the cost could escalate, with fixed penalty fines ranging from £50 to £2,500 a day.

Jane Watford, Payroll Manager said: “It is important to remember that the contributions must be paid into your scheme at each pay reference date. I would therefore advise SME owners to calculate how much they are likely to have to pay in contributions at each date, and set their budget accordingly.

“We can help by providing payroll services as well as sound financial advice for SMEs. Receiving help can reduce the cost of auto-enrolment for your business by ensuring that you’re compliant and avoid financial penalties,” concluded Jane.

Small employers begin auto-enrolment process

June 2, 2015 Posted by Wellden User

Small and micro businesses employing fewer than 30 employees have begun auto-enrolling their staff onto workplace pension schemes.

The process will last until April 2017 and the exact timing of business’ staging dates will depend on the last 2 characters of their PAYE reference numbers.

Firms employing between 40 and 49 workers will stage in August 2015 while those with 30-39 members of staff will start complying in October 2015.

The auto-enrolment process has been ongoing from October 2012, with all large and medium-sized firms now having passed their staging dates and enrolled their employees onto a company scheme.

Figures from the Pensions Regulator show that around 769,000 small and micro firms will pass their staging dates by April 2017.

Up to 14,000 businesses with fewer than 30 employees will begin the process from June 2015, according to the Federation of Small Businesses (FSB).

John Allan, national chairman of the FSB, said the process will present a “major challenge” for small businesses:

“Awareness of the impending changes has picked up, but many have still yet to put into place plans to meet their duties.

“Small business owners are not pension experts and a significant number will not have any staff saving into an existing workplace pension scheme. These businesses require a clear and simple process, and readily available impartial advice and support.”

Talk to us today about complying with auto-enrolment.

Employers want auto-enrolment contribution increase

May 28, 2015 Posted by Wellden User

More than three quarters of employers think that auto-enrolment pension contributions should be increased, according to research by Jelf Employee Benefits.

Employers operating auto-enrolment workplace pension schemes are required by law to pay a minimum of 1% into employees’ pension pots. This is due to rise to 2% from 1 October 2017 and 3% from 1 October 2018.

However, the research reveals that the majority of employers think this should rise further. The survey of 200 HR and finance experts found that 76% want minimum contribution rates to increase. Just 15% thought that no increase was needed.

The research found:

85% of respondents said employers should bear part or all of the contribution increases
14% thought employees should pay for increased contributions
4 in 10 said they would raise contributions ahead of legislated increases to spread the cost over several years.

Steve Herbert, head of benefits strategy at Jelf, said:

“Frankly, we were a little surprised at these results. Many employers are yet to reach their staging date for auto-enrolment, and a significant proportion of those who have already staged are not yet at the full contribution rate. It is therefore somewhat surprising that employers appear so supportive about a further increase to their pension contribution costs already.”

Auto-enrolment minimum contribution schedule

Employer’s staging date	Employer minimum contribution	Total minimum contribution
To 30 September 2017	1%	2%
1 October 2017 to 30 September 2018	2%	5%
1 October 2018 onwards	3%	8%