Occupational Pensions / Auto Enrolment
ADVICE ON AUTO ENROLMENT PENSIONS IS NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.
THE VALUE OF PENSIONS AND THE INCOME THEY PRODUCE CAN FALL AS WELL AS RISE. YOU MAY GET BACK LESS THAN YOU INVESTED.
TAX TREATMENT VARIES ACCORDING TO INDIVIDUAL CIRCUMSTANCES AND IS SUBJECT TO CHANGE.
Occupational Pensions
How occupational pension schemes work
Every payday, a percentage of the employee’s pay is deducted automatically from their salary or wages and invested in the scheme. The employer also contributes to the scheme on the employee’s behalf as does the government in the form of tax relief.
Two types of scheme
In a ‘defined contribution scheme’, the employee’s retirement income is based on the contributions made, whereas in a defined benefit scheme, the employee’s pension income is based on his or her salary and length of service with the employer. Most occupational pension schemes are defined contribution schemes.
What happens if the employer goes out of business?
Whether the scheme is managed by insurance companies or by the employer, the pension funds are not available to creditors of the employer, so employees’ pension pots should not be affected if the employer goes bust. If the scheme is a trust-based scheme, employees will still get their pensions, although not as much because the scheme’s running costs will be paid out of members’ pension pots rather than by the employer.
Auto Enrolment
Under ‘Automatic enrolment’ rules, any employer (with at least one member of staff) must automatically enrol every employee between the age of 22 and State Pension age and earning in excess of £10,000 a year (2018/19 tax year) into a ‘Workplace pension scheme’.
Contribution costs
The minimum contribution for employers is 2% of the employee’s earnings, rising to 3% on 6 April 2019. Employees are obliged to contribute at least 3% of their earnings before tax, rising to 5% on 6 April 2019.
Read less
REQUEST A CALL BACK
NEWSLETTER
CONTACT US
Ashley Phillips Ltd
Suite 1C
Armstrong House
Flemingate
Beverley
East Yorkshire
HU17 0NW
T: 01482 427246
Email Us
Ashley Phillips Ltd is registered in England and Wales, No: 06069565. Registered Address: Daybreak, Arnold Lane West, Arnold, Hull, East Yorkshire, HU11 5HP
Ashley Phillips Ltd is an appointed representative of Intrinsic Financial Planning Limited and Intrinsic Mortgage Planning Limited, which are authorised and regulated by the Financial Conduct Authority. Intrinsic Financial Planning Limited and Intrinsic Mortgage Planning Limited are entered on the FCA register (http://www.fca.org.uk/register) under reference 440703 and 440718.
The guidance and/or advice contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.
© Copyright 2019 - Adviser Pro - All Rights Reserved
Design and Developed by Adviser Pro © 2019