Expert view: Plan ahead for auto enrolment
Angelo Kornecki from Astute Wealth Management advises employers to plan ahead for auto enrolment.The government has now made it abundantly clear that they intend to ensure that the majority of employees will have the option to start investing for their own retirement, rather than relying on state aid.
This will be done by making it mandatory for employers to automatically enrol eligible and entitled employees into a qualifying pension scheme. The employer will then have to contribute set percentages of the employee’s salary into the scheme on behalf of the employee.This is set at 1% until 2017 when it will be increased to 2%, and then 3% from 2018. It is thought that the government will monitor this strictly and it is likely that strict penalties will be imposed on employers who do not comply with the rules.
With the staging date for auto-enrolment now just around the corner for small & medium sized businesses, we expect there to be a significant increase in administration, cost and time required to implement these changes. This is all coming when the challenging economic conditions of recent years have stretched the resources of most successful of businesses, so planning for the changes is vital.
Astute Wealth Management