With retirements potentially lasting 30 years or more, the state pension of maximum £122.30 a week is generally considered insufficient income to maintain a desirable lifestyle throughout the post-retirement years.
In 2012, the Government brought about the biggest and most radical changes to pension reform in generations with auto-enrolment. Under the new regulations, employers are now required to enrol all eligible employees into a qualifying pension plan and make contributions into it.
Eligibility criteria are as follows:
- Employee is aged between 22 and the State Pension retirement age
- Employee earns more than £10,000 per year
- Employee is working, or ordinarily works, in the UK
Employers will be required to contribute a set percentage of each employee’s eligible earnings into each pension and the Government has set a minimum percentage that must be contributed in total (i.e. the employer’s contribution, the employee’s contribution and the tax relief).
A pension is a tax efficient method of enhancing an employee’s income in retirement. It is increasingly being viewed as a highly desirable employee benefit.
Pension funds grow largely free of all UK taxes. At retirement, the employee can take up to 25% of their accumulated fund as a tax-free lump sum with the remaining fund being used to secure an income.
Our experienced pensions experts will help you to understand the financial implications of auto-enrollment. We will also recommend and implement the most appropriate pension scheme, and assist with your strategy for communicating the changes to employees.
For more information about automatic enrollment and its wide-reaching implications for employers and employees, please visit: www.vintagecorporate.co.uk, call the team on 020 8371 5232 or email: firstname.lastname@example.org