How About The Auto-enrolment Advice?

How About The Auto-enrolment Advice?


The phrase “auto enrolment advice” refers to the system of a compulsory inclusion of all employees in the UK under the workplace pensions. The government of the UK has set the auto enrolment advice for all the registered business establishments in the UK that recruit people as employees while running their businesses here. The crux is that it’s non-negotiable, unless the employee or the employees, in particular, opt out of the auto enrolment advice voluntarily.

The auto enrolment advice aims to address the social security status of a person in terms of financial liberty even when the person is no longer working through an auto-enrolment to the workplace pensions during the heydays. This, in other words, means the government of UK has taken a social welfare measure for its citizens through this measure.

Can I get an Auto-enrolment?

Well, this may be your question after reading the first two paragraphs on the auto-enrolment advice. The answer is YES. Because, an auto-enrolment of employees to the workplace pensions has been made compulsory on the part of the employers by the government of UK. As such, everybody qualifies for the auto-enrolment provided he/she fulfils some conditions as detailed below.

1) Employees enrolled under the auto enrolment advice must be working in the UK at the time of the enrolment.

2) The earning per employee must exceed 10,000 pounds per year.

3)  Employees must have attained the minimum age of 22 years and must be below the age bracket of the State Pension. The highest age for auto-enrolment, therefore, is set at below 55 years.

The USP (Unique Selling Proposition) of the Auto-enrolment Advice:

The USP of an auto enrolment advice is manifold. To understand this better, you should know how you’re a pension fund is created.

Pension Fund = a percentage of an employee’s salary + the employer’s direct contribution + government’s contribution through the tax exemption.

Say, you contribute 40 pounds per year as your pension contribution while your employer contributes 30 pounds and the government contributes 10 pounds through tax exemption.In short, your pension fund equates to (40 + 30 +10) pounds; i.e., 80 pounds per year.

The point here is that you are losing a handsome amount of money every year, if you are not subscribing to the workplace pensions.Employees who enrolled earlier for a workplace pension and that is still in force will, however, not require enrolling a fresh. This goes in sync with the government of UK directives. In addition, you can get 25% of the pension fund tax-free based on the employers’ pension scheme.

Is there Any Cap on the Pension Amount?

Yes, there is a cap on the per week pension pay-out under the State Pension, though there is none for the workplace pensions. The latest cap on the State Pension has been set at 115.95pounds per week for individuals.

It means, an individual working in the UK can get the State Pension up to 115.95 pounds at the maximum. You will, however, be at liberty for deciding your workplace pension cheque.