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Don’t ignore the workplace pension!

Are you aware of your workplace pension? With the help of automatic enrolment, the way saving into pensions has been viewed is changing. Are you making the most of yours?

Since 2012, more than 5.4 million workers have been automatically enrolled into a workplace pension by almost 61,000 employers, according to the Department of Work and Pensions (DWP). 

By the time the process is complete in 2018, it is estimated that around 9 million workers will either be newly saving or saving more into a workplace pension thanks to the policy.

This is great news as it means that, as well as paying in yourself, your employer (and the government in the form of tax relief) also makes a contribution to your financial future.

With the launch of a new campaign from DWP urging employers and employees to make sure they are aware of workplace pensions, here’s the low-down to make sure you know what your workplace pension can offer you.

Automatic enrolment explained

Automatic enrolment is being introduced in stages up to 2018.  The largest employers started first, followed by medium-sized and finally, small employers.

Instead of opting-in, which was the case in the past, all qualifying employees of large and medium-sized firms are now automatically enrolled into their employer’s scheme – provided they are over 22 and earn more than £10,000 a year. 

If you haven’t yet been enrolled in a scheme, your employer will tell you the exact date it will begin automatic enrolment and whether or not you’re eligible for their scheme.

As long as you meet the above criteria, and work in the UK, you’ll be covered. This includes if you’re on a short-term contract, or an agency pays your wages, or you’re away on maternity, adoption or carer’s leave.

If you earn less than £10,000 you can ask to be enrolled and, as long as you earn more than a certain amount, your employer has to enrol you and make contributions for you.

As well as contributions from your employer, the government will contribute in the form of tax relief. You can also find more information on DWP's Workplace Pensions site.

Do I have to be part of my workplace pension?

You can opt out of your workplace pension if you want to.

But if you do, don’t forget you’ll lose out on your employer’s contribution to your pension, as well as the government’s contribution in the form of tax relief.

If you have debts that are proving problematic, automatic enrolment may not feel like the answer for you at the moment and understandably, you may want your focus on go on them instead.

Remember that you can always opt in later to your employer’s workplace pension scheme if you decide to pay off your borrowing first.

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  • caroline / 30 August 2017

    I earn £ 13995 p.a and have been with this small business for 2 years. I havn't been offered a work place pension, I am 54 and concerned. So I approached my employer ,he stated that he thought I would have my own private pension ( I have a very small one ) he said that the company has their own pension , he quickly left and I havn't seen or heard from him since, I'm worried that if I challenge I would lose my job. What do I do?

  • Ethan / 20 May 2016

    Informative read! It's so important to ensure you receive all the correct information on work place pensions (Rugby).

  • Seamus / 23 November 2015

    I don't earn enough to have a pension. I think it's unfair.
    What can I do. I work 16 hours per week. £7 per hour. No sick pay. Nuffink !

  • Ms A E Loe / 23 November 2015

    I cannot trace my pension, I am now 50 and might be entitled to my Civil Service pension.

  • david coates / 22 November 2015

    I run a small charity with two employees (me and one other person). Both have different private pension schemes that the Charity pay into already and has done so for over ten years.
    Does this mean we have to start again and transfer all our personal savings in our private schemes into some general pot? Where can I get advice about this?

  • Jenni Quinn / 16 November 2015

    What if you already had a private personal pension? Do you have to going the employers and put yours on hold?

  • H. Gawn / 15 November 2015

    'If you earn less than £10,000 you can still be enrolled as long as you earn a certain amount' - what is that amount?

  • Celia Beverton / 15 November 2015

    Your information does not mention the self employed could you enlighten me

  • Gordon Hartley / 15 November 2015

    Auto enrolment is fine, however nothing is ever said about all those who feed of your pension before you do. Then we have the losses and that happens and then when and if you have anything left the tax man takes the tax back. Pensions are good but for who?