Auto-enrolment

Print This Post

26 June 2014


The Government introduced auto-enrolment into pension schemes in 2012.

Auto-enrolment entails eligible employees being automatically enrolled into their employer’s qualifying pension scheme without any active decision on their part.  An eligible employee is an employee aged between 22 and state pension age and earning above the income tax personal allowance, which is currently £10,000.

If an employee does not elect to opt out of an employer’s pension scheme, this would invalidate ‘Enhanced Protection’ / ‘Fixed Protection’, which could, in due course, result in a significant lifetime allowance tax charge being incurred.  Employers are rolling out auto-enrolment through various ‘staging dates’ according to their employee numbers.  The largest employers have already commenced this process with smaller employers joining over the next 18 months.

On an ongoing basis employers are required to auto-enrol employees every three years and the process is continuous – meaning what?Individuals who currently benefit from the protections detailed above should take care to ensure that they ‘opt out’ of auto-enrolment to preserve the valuable protection and avoid an unnecessary tax charge.  As long as employees opt out within 30 days of auto-enrolment it is considered that the employee has not joined the scheme and the protection is safeguarded.

For further information contact:

Ian McNally

Director, Saunderson House

Ian.McNally@saundersonhouse.co.uk

T: +44 (0)20 7315 6500

www.saundersonhouse.co.uk

 



Associate News is provided by Legal Futures Associates.
Find out about becoming an Associate



Legal Futures Blog

How to make a case to the unconverted

Jonathan Whittle

The prospect of change is a daunting one, whether you’re a global firm or a small one. You might think that your firm’s working practices are fine, or that there’s no value in altering the way you do things because of the disruption it would cause. You might even see the benefits of using a different methodology, but still refuse to put the effort in to implement it – and you wouldn’t be alone. From our research in the 2016 report, The Riddle of Perception, we know that 73% of lawyers believe that adapting to change is not where their strength lies. However, it’s no longer optional.

November 16th, 2017