Pension

As part of our monthly payroll provision we provide pension services through the government pension scheme NEST.

All employers have a legal obligation to open a scheme for eligible employees who wish to join a pension scheme. If your employees are not eligible to start a pension scheme you still have certain obligations to The Pension Regulator.

Who can join a scheme

Entitled worker – is aged 16 and 75, has earnings at or below the lower level of qualifying earnings. An entitled worker is allowed to join their employer’s pension scheme if they wish, but their employer is not obliged to make contributions.

Non-eligible jobholder – is either aged between 16 and 22 or between the State Pension Age and 75 and has earnings above the lower level of qualifying earnings, OR aged between 22 and State Pension Age, and with earnings above the lower level of qualifying earnings but below the earning trigger.

Non-eligible workers are entitled to join their employer’s pension scheme if they wish to but are not entitled to receive pension contributions to their scheme made by their employer.

Eligible jobholder – is aged between 22 and 75 and has earnings above the earnings threshold (over £833 per month for 2019/20).

Employers must make pension contributions for eligible workers unless the individual opts out of auto-enrolment. The employee must also make contributions unless they have opted out.

Earnings trigger – currently £10,000 per annum, £833 monthly, or £192 weekly.

Lower level of qualifying earnings – currently £6,136 per annum, £512 monthly, or £118 weekly.

 

Contributions

The employer and employee must make a minimum 8% contribution from the 6th April 2019. The employee must make a minimum contribution of 5% and the employer 3%, if the employer or employee wants to make larger contributions then they can arrange this as well.

Please get in touch if you are considering starting a pension scheme for your employees, we operate the government scheme NEST for our payroll clients. If you wish to find out additional information then drop us an email at mcdowallaccountancy@windowslive.com or use the contact form and we’ll be happy to setup and operate your pension provision along with your payroll requirements.