You'll probably have heard ‘workplace pensions’ mentioned in the media, which all employers legally have had to set up for their employees over the last few years. This process is called ‘automatic or auto-enrolment’ and millions of people now have one of these types of pension. Find out if this could apply to you and more about the way we look after our workplace pension here at Prudential.
All employers in the UK have had to meet the government requirements to help their employees save for retirement since 2018.
All employers now have to provide a company pension scheme as part of their employment package to help employees save for their retirement. These work by your employer paying into the scheme and usually topping up any payments you may also make. These payments are generally deducted directly from your pay (though sometimes are taken through salary exchange or salary sacrifice1 arrangements). The government may also add tax relief to your pension payments. Tax rules can change and the impact of taxation (and any tax relief) depends on your circumstances.
Company pension schemes offered by employers are managed in two ways. Either under a trust, where trustees look after the pension plan in accordance with the scheme rules. Or nowadays, many employers arrange for a ‘workplace pension’ with a pension provider, such as Prudential.
All employers in the UK have had to meet the government requirements to help their employees save for retirement since 2018 – earlier for larger employers. Whether you are entitled to a workplace pension will depend on your age and earnings. Your employer is required to give you details about the ‘auto-enrolment’ rules when they apply to them.
So if you’re employed, and your employer hasn’t already told you about auto-enrolment (and you’re not already a member of your employer’s company pension scheme) you may want to ask them about when auto-enrolment will apply or for details about their scheme and if you can join.
Your employer will need to enrol you into a workplace pension scheme if you:
If you’re already saving for your retirement in this way, you may want to check that your current payments will be enough to meet your income needs when you retire. It’s important that you consider taking professional financial advice as you plan your retirement, but our checklist might help.
If your employer’s scheme is set up under trust, the trustees2 have a duty to monitor the scheme, including checking it is value for money. To find out more about this, you should contact the trustees of your employer’s scheme.
Prudential Corporate Pensions Trustee Limited (PCPTL) is a corporate trustee company and acts as trustee for some employer’s schemes. Your scheme literature will let you know if this is the case for your employer’s scheme.
Find out more about PCPTL.
Or if your employer’s scheme is a workplace pension, since 6 April 2015, your pension provider must set up an Independent Governance Committee (IGC). Like trustees, an IGC has a duty to monitor the scheme, including also checking that it offers value for money.
Find out more about our Prudential IGC.
The government’s workplace pensions website is a good place to find out more about automatic enrolment.
So when considering your options when planning for retirement, in addition to seeking advice from a financial adviser, you can get advice from the Money & Pensions Service (MAPS) moneyandpensionsservice.org.uk.
General guidance and information on all aspects of pensions is available from MoneyHelper.
MoneyHelper Pensions Guidance
Money and Pensions Service
Telephone: 0800 011 3797
For people over 50, Pension Wise is also available. This Government service from MoneyHelper offers guidance to people with personal or workplace pensions on all the options available for their pension savings. You can have a free consultation online, over the phone and face to face.
Telephone: 0800 280 8880
These services are free and impartial and using them won’t affect your legal rights.
1. A tax efficient method of increasing the money paid into a pension scheme by giving up existing salary or proposed salary increases.
2. A person appointed to manage and safeguard the assets of a trust.
Our articles, guides and videos can help you learn more about saving in a pension and retirement planning.
If you are a member of your workplace pension scheme your employer would normally, at least, match your contributions