The good news is we are all living longer, healthier lives!
Unfortunately this means that there will be a much publicised “hole” in the
government funds available to give us a living pension once we retire.
Currently every pensioner is funded by four workers, however in the next 30-40 years this will reduce to every pensioner being funded by two workers.
This, together with the fact that the majority of workers are not saving for their retirement, has led to the introduction of workplace pensions or automatic enrolment pensions.
Introduced by the last Labour government and ratified by the Coalition, the basic idea is that each worker contributes to their own pension plan from their qualifying earnings. The current figure is 3% of which 2.4% comes from the worker and 0.6% from the taxman (depending on how you set your scheme up). In addition to this the employer will make a 2% contribution.
In April 2019 this contribution level will increase to 4% worker, 1% taxman and 3% employer. There is the option for workers to opt out but this can only be done once they have been automatically enrolled and they must be re assessed on a specific date.
Workers can also have their enrolment postponed for up to three months and will be re-assessed at the end of this period. I’m sure you can appreciate this is only a brief overview but PPAE Ltd will be able to guide you through the legislation and help you operate a scheme that runs smoothly for you and your workers.
Contact us on 01453 299101 or firstname.lastname@example.org for a FREE initial discussion