Prepare now for pension changes

By LBV

21 Dec 2010

The government has announced one of the most radical changes to the pension system in a generation. All “eligible jobholders” of every business must be enrolled into a pension scheme.

The rolling changes beginning in October 2012, will be fully introduced by September 2016, at that time all businesses must either offer their own qualifying pension scheme or enrol staff into the government backed National Employment Savings Trust (NEST).

Eligible jobholders are employees who earn at least £7,475 a year in 2011/2012, are aged at least 22 and have not yet reached State Pension Age. The contributions will be based on their income above the national insurance primary threshold of £5,715.

For employees whose income lies between these two figures, there will be the option to opt into the pension scheme and receive an employer contribution.

The government claims the move will see between four and eight million workers begin to save into a pension scheme for the first time. It will apply to all businesses – whatever their size. Once fully operational, the scheme will see employers and employees together contributing 8 per cent of income into a pension.

For companies who do not currently make any pension provision for staff, and there are many, the changes will be significant and costly.

Businesses need to factor the contributions into their business and financial plans. Setting up pension schemes for staff can be a labour intensive job, especially for those companies who may not have an in-house HR department. The sooner businesses start planning the better.

Employers will have the choice to enrol employees into an existing qualifying scheme, set up a new scheme or use NEST. So the first thing to do is to check the staging date – the date when a business must commence enrolment of its staff.

Following this, a business should look at the current take-up among staff for any existing schemes and assess how costs will increase under auto enrolment.

Importantly, companies that do not make pension provision should look into the potential costs of auto enrolment and review who will need to be auto enrolled so that there are no surprises when the staging date does arrive. Directors will also need to decide as soon as possible what kind of scheme to use.

There is no avoiding auto enrolment, however if businesses plan early enough it should lessen the impact. Through embracing the changes positively, it can actually provide a powerful employee benefit to boost staff morale.

Businesses should seek professional advice if there is any doubt about the effect of the changes.

Paul Jackson
Taylor Patterson
 

Enjoyed this? Read more from LBV

Latest news

1

East Lancashire Learning Group named UK digital transformation leader in CIO 100 Awards Andrew Dewhurst with the award win

East Lancashire Learning Group named UK digital transformation leader in CIO 100 Awards

09 Oct 2025

2

PHX Training appoints new business leader in Blackpool Jason Davenport PHX Training

PHX Training appoints new business leader in Blackpool

09 Oct 2025

3

Velocity seals Airbus extension worth up to $54m Velocity Composites Has Announced Its Entry Into The Us Market

Velocity seals Airbus extension worth up to $54m

08 Oct 2025

4

First speakers confirmed for Lancashire Business Day Dave Walker with Richard Slater at Lancashire Business Day

First speakers confirmed for Lancashire Business Day

08 Oct 2025

5

Hemmings steps down as PNE chairman as hunt begins for new investors Craig Hemmings

Hemmings steps down as PNE chairman as hunt begins for new investors

08 Oct 2025

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

Help to grow management course
Help to grow - barriers to growth.png.png
LBV Hub Seminars
26 Sep 2025 - 16 Dec 2025

Help to grow management course

Preston Campus , Preston , PR1 2HE

09:00 - 15:00

Empowering Franchise Growth in the North West
Empowering Franchise Growth in the North West event
LBV Hub Seminars
09 Oct 2025 - 09 Oct 2025

Empowering Franchise Growth in the North West

Forbes Solicitors, Sceptre Way, Walton Summit Centre, PR5 6AW, PR6 6AW

08:00 - 10:00

Empowering franchise growth in the North West
TFA Event - Empowering Franchise Growth.jpg.jpg
LBV Hub Seminars
09 Oct 2025 - 09 Oct 2025

Empowering franchise growth in the North West

Forbes Solicitors Sceptre Way Walton Summit Centre , Preston, PR5 6AW

08:00 - 10:00

Advantage: AI – A Workshop for Business Leaders – Oct 10th
Ai 10.10.png.png
LBV Hub Seminars
10 Oct 2025 - 10 Oct 2025

Advantage: AI – A Workshop for Business Leaders – Oct 10th

Door4 Office, Burnley Wharf, Burnley, BB11 1JG

09:00 - 12:00

The New Employee Rights Landscape: Day One Compliance Essentials
EventBrite NORi - 15th Oct 2025 Webinar.png.png
LBV Hub Webinar
15 Oct 2025 - 15 Oct 2025

The New Employee Rights Landscape: Day One Compliance Essentials

Microsoft Teams, Microsoft Teams, PR253XH

13:30 - 15:00

Unlocking major project opportunities in the North West
Lancs-cham-logo.jpg.jpg
LBV Hub Seminars
15 Oct 2025 - 15 Oct 2025

Unlocking major project opportunities in the North West

Strathmore Hotel, Morecambe, LA4 5AP

08:00 - 10:00

October Freelancer Meet-Up
LBV Hub Networking
16 Oct 2025 - 16 Oct 2025

October Freelancer Meet-Up

Society1, Coworking Space, Preston, PR1 3LT

10:00 - 11:30

The Autumn Re set - pour me a wine
LBV Advert_Autumn Reset 1200 x 630px.png.png
LBV Hub Networking
16 Oct 2025 - 16 Oct 2025

The Autumn Re set - pour me a wine

The Artistry House , Preston , PR1 3JJ

17:30 - 19:30

The Business Network Central & East Lancashire
LBV Header (26).png.png
LBV Hub Networking
16 Oct 2025 - 16 Oct 2025

The Business Network Central & East Lancashire

Stanley House, Blackburn, BB2 7NP

11:30 - 14:15

Women scaling up Blackpool Fylde and Wyre
LBV Hub Seminars
22 Oct 2025 - 09 Jan 2026

Women scaling up Blackpool Fylde and Wyre

The Small Business Academy, Blackpool, FY4 5JX

09:30 - 15:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV124 Online Graphic
Subscribe now

Weekly news bulletin