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Employer Duties for Auto Enrolment Pensions for Employers

Our population in the UK is growing and growing old.  The forecast population for 2037 is 73 million and the number of older people is set to grow considerably as a proportion.  For example, the number of people over 80 will double from 3 million to 6 million in the same timescale, with the number of people at our above state pension age up 31% to 16 million.
For the UK it means that there will be a significantly increased proportion of the total population eligible for pensions putting a highly increased financial burden on the economy.  To mitigate this future financial pressure the government passed laws that came into force in April 2014.  This change in law makes it easier for millions of people to build up a pension to try to avoid the scenario of people living longer but under-saving for their retirement at the same time.

The law requires employers to automatically enrol certain members of their staff onto a pension scheme.  Essentially, it takes away the choice from employees of joining a pension scheme or not.  They must now join a pension scheme but can choose to opt out of their employers chosen pension scheme if they wish.  This change in law affects all employers in the UK and, if they have staff enrolled on their chosen pension scheme, they will have to contribute a minimum of 1% of the employees earnings this year.  This contribution escalates over the next 2 years.  Employers must have enrolled their employees onto a pension scheme by their designated staging date although they can defer the staging date for up to 3 months.  Employers must also write to all of their staff telling them how they have been affected.

The information in this blog represents the opinion of Clayton Holmes Naisbitt and is for information only. You should always seek independent financial advice before taking action.

For more information and advice please contact us on 0113 387 8240 and we’ll be very happy to help.


(Source regarding the requirements for Workplace Pensions is