The Government’s flagship scheme to encourage more people to save towards their retirement is well underway – but there’s still a distance to go.

The Government estimates about seven million people are either not saving at all for retirement or not saving enough. Life expectancy is increasing and people are living longer in retirement, so the size of their pension pot will need to be greater to fund this. In addition, the Government may not be able to afford to keep State Pensions at their current level in the longer term.


Since October 2012, legal duties require employers to automatically enrol their eligible jobholders into a qualifying pension scheme. The reform is being ‘staged’ over a six-year period, depending on the size of the employer.

Under the workplace pension reform, also known as ‘automatic enrolment’, all UK businesses will legally have to offer pensions to workers eligible for auto enrolment by 2018. Employers will also have to contribute towards their workers’ retirement savings, although workers can choose to opt out of the scheme.

Automatic enrolment is a set of duties to make sure all eligible employees automatically become members of a qualifying pension scheme with a high enough level of contributions.

If you have an existing pension scheme for your workers, you may wish to consider enrolling all eligible jobholders into this scheme. To do this, your existing scheme will need to qualify as an automatic enrolment scheme.

If you do not have an existing pension scheme or you cannot use your existing pension scheme(s) for automatic enrolment, you will need to choose another pension scheme. In this case, all eligible jobholders will need to be automatically enrolled in your new pension scheme.

If you need to select a qualifying pension scheme, you can choose from a number of pension providers, including the National Employment Savings Trust (NEST) which has a public service obligation to accept all employers that apply to join it.

To be a qualifying scheme, minimum contributions or above must be made, or it must provide a minimum rate at which benefits will build up.

If you are an employer, preparing for automatic enrolment means familiarising yourself with automatic enrolment sooner rather than later and making sure you understand the potential impact on your business. To find out more about auto enrolment and your responsibilities, please contact us on 02380 420 606 to discuss your particular situation.