The Government has confirmed details regarding automatic pension enrolment thresholds, which are to be aligned with tax and national insurance contributions, and automatic enrolment dates.
Employees must be automatically enrolled into a pension scheme providing they are:
- Earning £8,105 and over – this figure is aligned with the personal allowance.
- Not already in a qualifying pension scheme.
- Are aged 22 and over, and under the state pension age.
- Working in the UK.
The following thresholds when working out employer contributions will apply:
- Qualifying earnings will be those between £5,564 and £42,475. Employers will only have to contribute pensions on behalf of employees between these thresholds and will use this threshold to work out the amount employees are entitled to.
- Employees earning less than £5,564 are entitled to join the pension scheme, although employers are not required to contribute on their behalf.
Automatic enrolment is being gradually phased in from the following dates:
- Large employers with 120,000 or more employees will auto-enrol employees on 1 October 2012.
- Those with over 250 employees will begin to enrol employees from 1 February 2014.
- Those with employees between 50 and 249 members will have from 1 April 2014 until 1 April 2015.
- Those with employees between 30 and 49 employees will be expected to comply from 1 August 2015 to 1 October 2015.
- A test tranche for fewer than 30 employees will take place between 1 June 2015 and 30 June 2015.
- Those with employees of fewer than 30 will have to comply by 1 January 2016 and 1 April 2017.