Workplace Pensions

Workplace Pensions are slowly coming into force for all UK employees over the age of 22 who earn over £10,000

They are a GREAT way to save for your future as your employer and the Government will also both contribute 

You will be auto-enrolled in this when your workplace becomes eligible BUT can opt-out if you want to save in another sort of personal pension

 

Need to know

  • If you don't have your own pension you will have to live on the State Pension (currently only £113.10 a week) for your retirement. A Workplace option is a very straightforward way to save extra for your future
  • Lots of big businesses already have Workplace Pensions. You can check and see when your workplace will become eligible on this simple tool from Gov.UK
  • You will be auto-enrolled when your workplace becomes eligible but can opt out by asking your employer for an 'opt out' form
  • If you opt out within a month of being enrolled you will get any money that has paid in back, after that month the money will stay in your pension
  • YOUR EMPLOYER WILL RE-ENROL YOU EVERY 3 YEARS FOR AS LONG AS YOU ARE ELIGIBLE
  • There are minimum contributions that will be taken automatically from your wage once you are enrolled; it is currently 0.8% for you, 1% for your employer and 0.2% for the Government
  • From October 2018 your minimum contribution will be 4%, your employers will be 3% and the Government's 1%: For every £100 you earn, you’ll put £4 into your pension, your boss will add £3 and the Government will add £1
  • Part time workers earning under the threshold can ask their employer to opt in and if they earn over £5,772 a year their employer will also contrbute
  • As with most pensions you won’t be able to access the money until your are 55 years old
 

Automatic enrolment date for all employers

Employer sizeAutomatic Enrolment duty date 
 FromTo
250 or more members1 October 20121 February 2014
50 to 249 members1 April 20141 April 2015
Test tranche for less than 30 members1 June 201530 June 2015
30 to 49 members1 August 20151 October 2015
Less than 30 members1 January 20161 April 2017
Employers without PAYE schemes1 April 2017- - -
   
New employers Oct 2017Immediate duty- - -


 

Find out more

If you have general questions about the Workplace Pension you can contact the DWP Workplace Pension Information Line Monday to Friday, 8am to 6pm:


Telephone (English): 0345 600 1268
Telephone (Welsh): 0345 600 8187
Textphone: 0345 850 0363

For detailed financial advice you would need to talk to an Independent Financial Advisor (IFA) who can charge  £75-£250 an hour.

For free advice you can contact the Pension Advisory Service, we'd recommend this as your first call as they will tell you if it's worth seeing an IFA
 

Pension Advisory Service


Why we like it:

  • FREE advice service
  • get more advice over the phone on 0300 123 1047
  • live web chat available
  • can give general advice on types of pension and the next steps to take

Watch out:

  • unable to give specific financial advice

Find an IFA


Why we like it:

  • lists FCA regulated Financial Advisors
  • Advisors are given star ratings by past customers
  • can search by area
  • can send a message to multiple IFAs at the same time
  • first meeting is often free

Watch out:

  • IFAs can charge £75-£250 an hour
  • how much they charge is not listed, you have to request the info

State Pension

A state pension is available to everyone who has paid National Insurance for 30 years or more, or has been claiming benefits for unemployment or sickness

You can top this up with voluntary payments to ensure you qualify

It is currently £115.95 per week but rises every year by at least 2.5%

Women currently need to be 62 to claim and men 65, the ages will steadily rise, those born after 6th April 1978 will need to be 68 before they can claim

You can work out how much you are currently entitled to, and how many years you have left until you can claim using the State Pension calculator

 

2016 Pension Changes

  • From April 2016 those who want to sell their annuity can do so
  • If you cash in your annuity you will only have to pay the income tax rate for the individual, not the previous 55%
  • This means that people will be free to spend as much or as little of their pension pot as they want
 

The inside track

  • You may be able to stay in the scheme but reduce your contribution. You would have to check with your employer and pension provider
  • If you move jobs you may be able to join your new work place's pension, continue paying into your old workplace pension or combine old and new. See what options your provider offers
  • Anything paid into your workplace pension, whatever your work circumstances, will remain invested and tax free until you are the right age to access it

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