A potted guide to Auto enrolment
Auto enrolment is the UK’s workplace pension initiative. To qualify you must be between the age of 22 and the state pension age and earn over £10,000 a year. Anyone aged 16 to 74 and earning between £6,136 and £10,000 a year can ask their employer (as at 2019/20) to enrol them in a workplace pension scheme.
Auto enrolment is not the same as ‘contracting’ into or out of a private pension. Your employer has a legal obligation to make sure you have access to a good quality pension.
When you’re Auto enrolled by your employer you are free to opt out within one month. The opt out period starts from either the date you were enrolled, or when you received your enrolment letter. If you made any contributions during the opt out period, you will receive a full refund from your employer.
When your employer enrolled you in a workplace pension they should have let you know how you can leave, if you didn’t want to save for your retirement.
Under the rules of Auto enrolment, if you have opted out of a workplace pension, your employer will ask if you want to be re-enrolled. This can happen every three years.
Sometimes circumstances change and this may affect how you feel about saving into a workplace pension. If things aren’t right or your priorities change, you do have the option of either temporarily stopping contributions or leaving the Scheme.
It’s important to think carefully about your decision. If you stop contributions, funds will no longer be paid into your pension savings, your employer may also stop paying contributions and you won’t benefit from tax relief. Your pension savings will remain invested with us until you retire. Alternatively, you can transfer your pension savings to another pension provider.
Should your circumstances change, you may want to start contributing again. To do this, speak to your employer.