Workplace Pension Reform -Are you ready?
Millions of people are not saving enough for their retirement. According to the Department for Work and Pensions;
- In 1901 there were 10 people working for every pensioner in the UK.
- In 2005 there were 4 people working for every pensioner.
- By 2050 it is expected that this will change to just two workers for every pensioner.
The Pensions Act 2008 introduced a series of reforms to increase private pension saving so that more people have the chance to save for their retirement. Beginning in 2012 and introduced in stages over 4 years, all employers must provide a qualifying pension scheme and assess their workers under a set of prescribed rules in order to identify the category that they qualify for. The government has staggered the start dates by which employers have to be compliant with this new legislation. This date is referred to as the ‘staging date’ and all employers will be contacted by the government prior to their staging date.
For employers who currently do not have a qualifying scheme the government has introduced a new scheme called NEST (National Employment Savings Trust). This will be available to any employer who chooses to use it. It is designed to meet the needs of people who are largely new to pension saving. NEST can be used as a sole scheme, or alongside an existing scheme.
Your current scheme may already meet the standards and possibly exceed them; however it is strongly recommended that you speak to your pension provider in advance of your staging date.
What should I do now?
Your current pension provider may have been in contact with you already. It might seem early days, however there is a lot of work to be done between you and your pension provider to ensure that you comply with the legislation and are ready for your staging date.
Payescape may already be providing you with information for your pension provider, however we appreciate that different information may well be required from your staging date. Reports will be available to satisfy the criteria on reporting to your pension provider.
We suggest that you –
- Look up your staging date (see link below)
- Start planning for when you might need your pension scheme
Below are just some of the links you may find useful in defining the criteria and the employer’s duties.