WHAT IS AUTO ENROLMENT?
You may have heard about changes to pensions at work. The changes mean that all employers will have to offer their workers a chance to join a pension scheme. HEADS Recruitment will put our Agency Workers into a scheme after you work 12 weeks, this is called automatic enrolment. HEADS Recruitment will start their Auto Enrolment of Agency Workers 12 weeks from August 1st 2013.
WILL I BE AUTO ENROLLED?
You’ll be automatically enrolled if you’re:
- at least 22 and under State Pension age
- working or ordinarily working in the UK
- earning over £9,440 a year.
If you’re not automatically enrolled you can ask HEADS to enrol you if you’re aged over 16 and below age 75. Everyone who is automatically enrolled will be entitled to contributions to their retirement pot from their employer. If you ask HEADS to enrol you in the scheme you’ll be entitled to contributions from your employer if you earn over £5,668 a year.
WHAT SCHEME WILL I BE AUTO ENROLLED WITH?
NEST is the scheme that HEADS will use for their Agency workers. It’s been set up as an easy and low-cost way to put money aside for when you’re older. HEADS will let you know if you’re being automatically enrolled into NEST. If you are you’ll get a chance to opt out and if you join you can have a say about what happens to your money. If you’re not being automatically enrolled, HEADS will still give you information about joining the scheme if you want to. NEST know pensions can seem confusing. That’s why they don’t use jargon and take the time to make sure information about your retirement pot is easy to understand.
WHAT WILL BE PAID IN MY POT?
In most cases contributions will come from you, your employer and the government. Minimum contributions start low and will increase over a number of years.
Here’s an example of the monthly contributions for a worker earning minimum wage or £240 per week in 2013. (This example is calculated using qualifying earnings. This means the money you earn above £5,668 and not more than £41,450)
|Employer contributions per month||1% = £5.68|
|Your contributions per month||0.8% = £4.55|
|Tax relief||0.2% = £1.13|
|Total||2% = £11.36|
HOW CAN I MANAGE MY PENSION?
Once you’re a member of NEST you can switch on your online account. You can also let NEST know your email address so NEST can send you news and information by email. This helps NEST keep costs low so more money goes towards your retirement. You can log into your online account whenever you want and see exactly what’s being paid into your retirement pot. You can also use it to let NEST know about any updates to your personal details, change how much you want to contribute or tell them when you want to take your money out.
WHAT IF I DO NOT WANT TO BE IN A PENSION SCHEME?
Being automatically enrolled doesn’t mean you don’t have a choice. If you’re automatically enrolled you can choose to opt out of the scheme within one month of enrolment. If you opt out, any money you’ve contributed with this employer will be refunded, but you should think carefully before you opt out. Opting out means you’ll lose out on employer contributions and tax relief that would have gone into your retirement pot.
WHERE CAN I FOUND OUT MORE?
For more information or to find out more about NEST, there’s lots more information and answers to your questions on the website Nest Pensions.