Auto-Enrolment Has Already Made A Difference To Pension Uptake
April 20, 2014 By SGW Payroll | Budget
Auto-enrolment in workplace pension schemes is compulsory, but employees are free to opt out. However, despite this, pension uptake saw a massive increase in 2013, according to official figures from an Office of National Statistics survey.
The 2013 Annual Survey of Hours and Earnings: Summary of Pension Results (http://www.ons.gov.uk/ons/rel/ashe/annual-survey-of-hours-and-earnings-pension-tables/2013-provisional-results/stb–2013-annual-survey-of-hours-and-earnings–summary-of-pensions-results.html) showed that 50% of employees in the UK now belong to a workplace pension scheme. This was the first increase recorded since 2006.
Auto-enrolment appeals to private sector and public sector employees alike
According to The Pensions Regulator (http://www.thepensionsregulator.gov.uk/automatic-enrolment.aspx ), there are now over three million workers in workplace pension schemes, a figure which could well be attributed to the new scheme. Overall, the proportion of employees in the public sector with a workplace pension in 2013 was 85%; for the private sector, it was 36%.
51% of employees working for large private sector employers – that is, firms with 5000 or more workers – were in workplace pension schemes last year. In 2012, the figure was 36%.
75% of full time public sector staff earning between £100 and £200 weekly had a workplace pension in 2013, whereas the figure the previous year was 59%.
With these increases of 15 and 16 percentage points respectively, it seems that the auto-enrolment scheme may well have had an impact on the uptake of pensions.
Impact on organisations
At present, it is the larger organisations that are legally obligated to comply with auto-enrolment; the first ones involved were those companies employing upwards of 100,000 people. But the scheme is now being rolled out to smaller employers. Before long, every employer’s finance director will need to be fully conversant with the technicalities of auto-enrolment. For those organisations with 50 or fewer staff, the staging date (i.e. the deadline) is April 2015.
As mentioned above, employees can opt out of the scheme. But everyone who meets certain criteria must be enrolled in the first place – and, on the strength of the figures above, it is likely that even the least populated of SMEs will be faced with strong demand from its employees for a workplace pension.
Coping with auto-enrolment
Since all employees who are on PAYE will need to be enrolled, firms will need to make the necessary arrangements with pension providers, and perform the calculations required to ensure compliance with auto-enrolment.
The calculations involve all the elements that make up an employee’s gross income and, coming on top of other changes that workplace finance departments experience at the beginning of a new tax year, it can be rather trying for finance directors – especially when it comes to payroll.
This is why it makes sense to let someone else take the strain. SGW Payroll is a payroll services provider that will work with your company to set up a comprehensive payroll system. All the calculations will be done whenever they are required, compliance with legislation is guaranteed, and if there are any changes needed, you can contact us to discuss what needs to be done.
Why not call us on 0800 622 322, or email us today to find out how we can help your business manage its payroll and pension responsibilities?Return to newshttps://www.sgwpayroll.com/news/latest-news/