What is an Auto-Enrolment Pension?
In 2012, the UK government recognized that retirement savings were inadequate among the UK population and introduced the concept of auto-enrolment to tackle this issue.
In simple terms, this scheme mandates that UK companies include all eligible employees in a pension plan. Both the employer and employee make contributions based on a percentage of the employee's salary during each payroll cycle. Employees do have the option to opt out if they prefer to handle their retirement savings independently.
Employers were assigned a "staging date" by which they were required to start enrolling eligible workers in the scheme. This date depended on the number of employees they had on the payroll in April 2012. The goal was to have all companies operating under this scheme by October 2018.
Eligibility for Auto-Enrolment Pension
Employees meeting the following criteria will be automatically enrolled:
Age between 22 and below the state pension age
Earning an annual income exceeding £10,000
Primarily working in the UK
Impact on Recruiters
Auto-enrolment holds significant importance for recruiters who engage with temporary workers on a Pay As You Earn (PAYE) basis. Recruiters bear the responsibility of enrolling these workers into a suitable pension scheme.
However, assistance is available to ease the burden.
How Can Borderless Payroll Assist?
As we are highly experienced in this sector with an expansive network of pension professionals, you can rely on Borderless Payroll to take care of your workforce and help manage your administrative responsibilities.
With years of experience serving temporary and permanent staff, contractors and freelancers, we tailor our services to align with their busy schedules. We are committed to supporting all companies, ensuring peace of mind for all parties involved.
For more information on your financial matters or to understand how auto-enrolment pensions may affect you, our experts are available for assistance. Feel free to request a callback, and we'll get in touch promptly.
About the author
Peter has general oversight across all local payroll operations. He manages a small team of payroll administrators with expert knowledge in local jurisdictions. Peter knows everything about pensions!