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

Bellway to build 183 high quality new homes Royal Bowland Park street scene NEW.jpg.jpg

Bellway to build 183 high quality new homes

29 Oct 2025

2

University of Lancashire recognised for entrepreneurship and supporting business growth - Representatives from the University's Business School, local SMEs and the IOEE

University of Lancashire recognised for entrepreneurship and supporting business growth

29 Oct 2025

3

£8bn Typhoon order is great news for Lancashire BAE Typhoon ECRS Mk2 Radar

£8bn Typhoon order is great news for Lancashire

28 Oct 2025

4

Award-winning Lancashire wedding venue and hotel is sold The Mill at Conder Green

Award-winning Lancashire wedding venue and hotel is sold

28 Oct 2025

5

PM+M announces another 19 promotions across the firm PM+M promotions

PM+M announces another 19 promotions across the firm

27 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
November / December 2025 Magazine Launch Event
Holiday Inn Hotel
Networking
28 Oct 2025 - 18 Nov 2025

November / December 2025 Magazine Launch Event

Holiday Inn, Blackpool

16:46 - 16:45

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

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

RISE - Lancashire's unique leadership programme for women
thumbnail_Emma Weston Illustration WENDY BOWERS RISE Illustrstion.jpg.jpg
LBV Hub Seminars
22 Oct 2025 - 18 Mar 2026

RISE - Lancashire's unique leadership programme for women

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:30 - 15:30

Chamber Breakfast Networking – November
Lancs-cham-logo.jpg.jpg
LBV Hub Networking
06 Nov 2025 - 06 Nov 2025

Chamber Breakfast Networking – November

Porsche Centre South Lakes, Carnforth, LA6 1FW

08:30 - 10:30

Lancashire Police business update with The Police and Crime Commissioner
Lancs-cham-logo.jpg.jpg
LBV Hub Roundtables
10 Nov 2025 - 10 Nov 2025

Lancashire Police business update with The Police and Crime Commissioner

Lancaster Castle, Lancaster, LA1 1YN

14:00 - 16:00

AI, Creativity, and what it means to be human
2.jpg.jpg
LBV Hub Networking
11 Nov 2025 - 11 Nov 2025

AI, Creativity, and what it means to be human

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 20:00

Beyond the Brand: Building trust through values and integrity
1.png.png
LBV Hub Networking
11 Nov 2025 - 11 Nov 2025

Beyond the Brand: Building trust through values and integrity

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 20:00

The Business Network Central and East Lancashire
LBV Hub Networking
13 Nov 2025 - 13 Nov 2025

The Business Network Central and East Lancashire

Stanley House, Blackburn, BB2 7NP

11:30 - 14:15

The AI Lab: E-commerce
Ai Lab ecommerce (1).png.png
LBV Hub Seminars
14 Nov 2025 - 14 Nov 2025

The AI Lab: E-commerce

Door4 Office, Burnley Wharf, Burnley, BB11 1JG

09:00 - 11:30

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