Frequently Asked Questions for Employers
When will the legislation apply to me?
This depends on the number of employees you have and when you became an employer. To find out your staging date you can use The Pensions Regulator’s Staging Date calculator here (you will need to know your PAYE scheme number).
Which of my employees will be auto enrolled?
Workers are divided into categories based on their age and earnings. See the table below:
|Age||less than £5772||£5772 to £10000||over £10000|
|Under 16||Outside Legislation||Outside Legislation||Outside Legislation|
|16 – 22||Entitled Worker||Non-Eligible Jobholder||Non-Eligible Jobholder|
|22 – State Pension Age||Entitled Worker||Non-Eligible Jobholder||Eligible Jobholder|
|State Pension Age – 74||Entitled Worker||Non-Eligible Jobholder||Non-Eligible Jobholder|
|75 and over||Outside Legislation||Outside Legislation||Outside Legislation|
Only Eligible Jobholders will need to be auto enrolled. Any full time employee aged between 22 and state pension age who earns minimum wage will qualify, and many part time employees will qualify too.
How much is it going to cost?
Pensions contributions will be calculated based on your employee’s salary. There are two ways of calculating a pension contribution. You can calculate the contribution either based on the employee’s entire salary or based on current National Insurance bands (this is known as ‘Qualifying Earnings' and is cheaper). Enable Autoenrol will make contributions based on Qualifying Earnings unless the client instructs otherwise.
The percentage of your employee’s salary that you will have to contribute will be gradually increased.
|Date||Minimum % employer contribution||Minimum % total contribution|
|Now until 5th April 2018||1%||2% (including 1% staff contribution)|
|6th April 2018 to 5th April 2019||2%||5% (including 3% staff contribution)|
|6th April 2019 onward||3%||8% (including 5% staff contribution)|
Is there any help from the government for small employers?
The government has introduced a scheme to help small businesses save up to £2000 on their National Insurance bills – for more information about this see here.
What happens if I don’t comply with the legislation?
The Pensions Regulator can levy steep fines on employers who do not cooperate with the pensions legislation. There is a fixed fine of £400, and in addition you may be fined at a daily rate depending on the number of employees you have:
|No. Employees||Prescribed daily rate fine|
Can you give me any advice about pensions?
Unfortunately we are not able to give you any pensions advice. However, we can provide you with the details of an Independent Financial Advisor (IFA) who would be able to help – alternatively you can find an IFA near to you on Unbiased.
Can I ask my employees not to take up their pensions?
No, this is called inducement and is prohibited by auto enrolment legislation. You could face the fines and prosecution if you do not perform your legal duties.