An easy guide to the 2012 Pensions Reform – Auto-Enrolment

This year will see the start of the introduction of an employer’s responsibility to automatically enrol eligible staff (*) in to a qualifying pension scheme.

So what are the employer’s responsibilities?

–          Assess any existing pension scheme that they offer to staff – does it qualify (#)?

–          Update an existing scheme / provide a qualifying pension scheme

–          Pay employer contributions and employee contributions via payroll

–          Let eligible staff know that have been enrolled and they have the right to opt out

–          Register with The Pensions Regulator and provide details of your pension scheme and the number of staff who are enrolled

 When are the changes coming in?

Employer Size

Automatic Enrolment Staging Dates



250+ members

1st October 2012

1st February 2014

50 – 249 members

1st April 2014

1st April 2015

Test tranche <30 members

1st June 2015

30th June 2015

30 – 49 members

1st August 2015

1st October 2015

<30 members

1st January 2016

1st April 2017

Employers without PAYE schemes

1st April 2017

(*) Eligible staff

– those that work or ordinarily work in the UK

– aged between 22 and state pension age

– earn more than the lower Income Tax threshold (£8,105 proposed for 2012/13)

– those earning more than a proposed £5,564 will also be eligible but the employer will NOT be obliged to contribute

How much needs to be contributed (# – qualifying schemes)?


Duration Employer Min. Total Min.


Staging date to 30.09.17




01.10.17 to 30.09.18

2% 5%
1st October 2018 onwards 3%


Be sure to plan ahead

–          As part of your business plan, ascertain your staging date

–          Get an existing scheme(s) reviewed. Is it qualifying?

–          Assess your workforce and budget for the potential increase in your pension costs

–          HR workload and costs will increase – and how to reduce this increase?

–          Let your workforce know what’s happening and when

It’s always useful to seek independent advice to help manage the transition to the new rules and most importantly to keep the costs to your business to a minimum.

Please note that the above is given for information purposes and does not constitute financial advice.

Author: Ian Marsh, Tait Walker Wealth Management

Tait Walker Wealth Management are authorised and regulated by the Financial Services Authority.


  1. While employers will soon have to provide access to pensions, it still falls on the employee to give up part of their wage for the scheme – and many people simply can’t afford this still. With the economy the way it is, too many people just can’t spare the money to provide for their future when their present is so bleak.

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