The automatic enrolment scheme, devised to ensure people have a better chance at a comfortable retirement by saving into a workplace pension has seen great success, as the Pensions Regulator announce over two million people have opted in to automatic enrolment.
In an economy where only one in three workers is retiring with a personally accumulated pension, the scheme which was launched in October 2012 aims to ensure that workers are financially ready.
All employers across the UK will eventually be required to enter their employees into the scheme providing their (employee’s) income is above £10,000, and of course those respective employees choose to ‘opt-in’.
According to the automatic enrolment registration report more than 3,500 employers have already ‘enrolled’ themselves into the workplace pension revolution and as specified by Department for Work and Pensions (DWP) they have ‘submitted an online declaration of compliance by completing registration with The Pensions Regulator’.
Pensions Minister Steve Webb said: “It is great news two million people are making a positive difference to their retirement prospects through automatic enrolment. The changes to workplace pensions will help millions more people achieve many happy new years in the future.”
In order to give employers a comfortable level of transition to adapt to the scheme, the scheme has been introduced slowly. It is expected that by 2017, 11 million people will have enrolled into a workplace pension.
There are schemes in place to help smaller businesses with the added cost. NEST – the National Employment Savings Trust has been created to alleviate the full amount of administrative and financial challenges auto-enrolment ensues, by way of providing a cost-effective place to enrol their staff. Of course, a business can choose to keep its own workplace pension scheme, however NEST has been created to provide a ‘public service obligation’ for any business wishing to use it.
Automatic enrolment is a positive initiative and will eventually be rolled out into every business across the country irrespective of their size by 2017; however, it is important for businesses to start their preparations early.
Charles Counsell, executive director of automatic enrolment at The Pensions Regulator said: “It’s really important to arrange your pension provision in plenty of time. We urge employers to have an agreement with a provider in place six months before staging. Don’t just assume the first provider you contact will be able to help you.”