Pension – what do you know about it?
I’ve been working with pension schemes for almost a year now, and it’s surprised me how many people need to become more familiar with how the Pension Scheme works or how it is important.
I’ve compiled a list of the most common questions I’ve encountered, and I’ll continue to update it accordingly.
How does auto-enrolment work?
Automatic enrolment is when an employee who meets certain requirements is made a member of a workplace pension scheme without needing to ask to be part of it.
In the past, it was up to workers to decide whether they wanted to join their employer’s pension scheme.
But since 2012, employers have been gradually required to automatically enrol their eligible workers into a workplace pension scheme.
As a result, lots more people are able to build up savings that they can use to provide them with an income from age 55 onwards. This will change to age 57 in early 2028.
Source Money Helper
Who will be eligible to auto-enrolment
Whether you work full-time or part-time, your employer will have to enrol you in a workplace pension scheme if you meet these auto-enrolment rules:
As long as you meet these auto enrolment conditions, you’ll also be covered if:
If you earn less than £10,000, but above £6,240 (for the tax year 2023/24), your employer doesn’t have to automatically enrol you into a scheme.
However, you can still ask to join – your employer can’t refuse and must contribute to you.
You can find more information Money Helper source
At the moment there is a debate in the House of Lords to change some of the requirements to auto-enrolment. Read more here Auto-enrolment extension
Can I opt not to be enrolled?
If you meet the auto-enrollment criteria you can’t avoid being enrolled but you can opt out. A valid opt-out needs to be provided within 30 days after your enrolment and it depends on your pension scheme how you should provide the opt-out notice. The best way to know what you need to do to opt-out is to contact your pension provider.
