If you do not currently offer your employees a company pension scheme then you need to take heed of a new scheme announced by the coalition Government.


All employers

From October 2012, all employers, no matter how small, will have to enrol staff in the National Employment Savings Trust (NEST), unless they already offer a comparable pension scheme to their employees.

NEST

NEST is a scheme designed to give people more access to good quality pension savings, especially for those on low to middle incomes. The Government hopes that this will prompt people to start saving for their retirement, particularly with people now living longer with little or no savings.


Phased implementation

Each employer will be given a date from when the changes must be in place. The reform will be phased in over a four-year period to 2016, starting with larger firms and then working down through medium and then small and micro-employers. The size of an employer will be based on PAYE data.

A minimum contribution level will also be phased in gradually, with employers eventually contributing at least 3% of qualifying earnings by October 2017.

Eligibility

To be eligible for enrolment, staff must work in the UK, be at least 22 and under state pension age and not already be in a suitable pension scheme. They will have to earn at least £7,475 a year, which will be the threshold for paying income tax from April 2011.

Transferable and may be used by multiple-employers

Friendly, approachable, reliable professionals

The advantage of NEST is that it can travel with a person from job to job, with more than one employer being able to contribute to a member’s retirement savings pot at the same time.


If you are an employer or considering employing someone, then George Hay can advise on a wide range of pension and tax issues to help ensure you are fully prepared for the changes.

The information provided in this blog illustrates my opinions and experiences, it does not constitute advice and I do not accept responsibility for any actions taken or refrained from as a result of reading this post.


Leave a Reply

CommentLuv badge