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Workplace pensions

As an employer, you must ensure that you automatically enrol every full-time or part-time if they:

  • At least 22 years old, but under State Pension age
  • Earn more than £10,000 a year
  • Not already enrolled in a suitable workplace pension scheme
  • Work in the UK, including seafarers residing in the UK

Can employees opt out of the scheme?

These rules also affect workers on short-term contracts, where an agency pays their wage, or they are on maternity, adoption or carer’s leave.

If an employee doesn’t meet the £10,000 earning criteria, but still earns more than £6,240 they can still ask to join a workplace pension, even though they do not meet the auto-enrolment criteria.

You cannot refuse this request and must make the same level of contribution that is made to those employees who do meet the qualifying criteria.

Can employees opt out of the scheme?

Employees can opt out of a workplace pension scheme at any time after they have been enrolled. In doing so they lose any right to employer’s contributions being paid, along with the tax relief that comes with this scheme.

They must inform the person that operates your workplace pension scheme and complete an opt-out form, which must be returned to you, their employer.

If they opt out within the first month of being enrolled any payments made can be refunded, but after this period will remain in their pension pot for their retirement.

How we can help:

Our payroll function can ensure that you are compliant with all your workplace pension requirements. We will make sure you are compliant and will ensure that any new qualifying employees are automatically invited to opt in, along with re-enrolment invites for any workers who have previously opted out.

To find out more about how our leading firm of accountants in Stratford-upon-Avon and Warwickshire can help you, please contact us.

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