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Many people feel that their retirement is too far off to worry about, but it’s never too early to start saving, some also feel they are to old to start saving, but in fact unless they retire in a few months it is worth starting a pension. With a workplace pension they don’t have to do anything either as it’s compulsory for employers to enrol them. Workplace pensions were introduced in 2012 to address the issue of people living longer and not having enough to live on.
Thanks to the governments new system of auto enrolment, millions of people now have a workplace pension, which will provide extra money to live on when they retire. Employees who are eligible, are now automatically enrolled into a pension scheme by their employer. These workplace pensions are paid into by the employee, the employer and in addition often receive tax relief.
By 2018 eligible employees will be automatically enrolled into a workplace pension provided:-
- They are not currently in one
- They are aged over 22 and under State Pension age
- They earn over £10,000 a year
- They usually work in the UK
It is possible to opt out of the scheme, although this will mean missing out on government and employer contributions, and also means no additional money on retirement. People do not have to stick to the minimum payment as it is possible for all to pay in a larger amount for bigger eventual benefits. Employers have a choice of auto enrolment scheme providers, and they vary as to the size of the eventual pension pot.
There have been a number of scams related to pensions, where people have succumbed to temptation and invested in great sounding projects like hotels, vineyards etc, only to be relieved of their life savings! There is lots of sound advice about this on the Pensions Regulator website.
We can answer any questions you may have about workplace pensions, whether you are an employee or an employer, call us on (01268) 680702.
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