BusinessKitBag 4:10 pm August 2nd, 2017

Best Workplace Pension Providers (2017)

Auto enrolment workplace pension providers for smaller employers

Workplace Pensions will become mandatory for all employers in the UK by February 2018, under the "Automatic Enrolment" scheme.

Workplace PensionsAuto enrolment is administered by the Pensions Regulator, and requires employers to set up a scheme and make contributions towards each employee who:

  • Is aged between 22 and the State Pension age,
  • Earns over £10,00 per year, and
  • Works in the UK.

You must have a scheme set up and any qualifying employees enrolled in it by your business's "staging date". You will be advised of your staging date, but can check it along with full details of your obligations as an employer at the Pensions Regulator website.

There are a large number of workplace pension schemes available. We have made our selections based on a range of factors including Defaqto rating, small business approach, and online administration tools.

Box Pensions

(5/5 from 1 review)

Don't just tick the box

Box Pensions is an exciting new brand of the Salvus Master Trust aiming to provide the Auto Enrolment market with a high quality pension scheme accessible to all medium, small and micro employers. If you are running a company that wants a good pension solution that truly benefits your staff then don't just tick the box with setting up any old pension scheme, open a Box Pension and see how you can do as good a job for your people as you might ask of them. | View Profile

Setup Fees: £300     Admin Fees: Nil

NOW: Pensions

(2/5 from 1 review)

Auto enrolment. Smarter. Simpler. Better.

NOW: Pensions is a simple way to provide a workplace pension. With an easy online sign up, access to all the tools and guidance you need to set up and manage auto enrolment, our quality-assured pension scheme is suitable for all types of businesses. Ideal for companies looking for complete support to set up and manage auto enrolment. | View Profile

Setup Fees: Nil     Admin Fees: £36/mth

Smart Pension

(5/5 from 1 review)

Free pension auto enrolment for business

Smart Pension was founded by experienced finance & technology professionals and has been designed specifically to support UK businesses faced with the challenges of auto enrolment. With thousands of satisfied employers, advisers and employees now using the platform, we know we offer the best workplace pension solution currently available in the UK. | View Profile

Setup Fees: Nil     Admin Fees: Nil

NEST

(4/5 from 1 review)

NEST is the workplace pension set up by government

NEST has been set up by the government especially for auto enrolment. We’re here to make sure that every employer has access to a workplace pension scheme that meets the requirements of the new pension rules. | View Profile

Setup Fees: Nil     Admin Fees: Nil

The BlueSky Pension Scheme

(5/5 from 1 review)

Advanced investment thinking

Operating for over 30 years, The Bluesky Pension Scheme is the chosen pension scheme for many industries and partnerships covering over 1 million employees and prides itself on innovation and value for money offering Target Date Funds as a member default and the opportunity to drawdown pension benefits in the UK’s first Trust based drawdown scheme, Crystal, operated by BlueSky Pensions UK Ltd. | View Profile

Setup Fees: £450     Admin Fees: £10/member/year

Lighthouse Pensions Trust

(5/5 from 1 review)

Workplace pensions made easy

Auto enrolment is a reality for many UK businesses, but this doesn’t mean that setting up a workplace pension scheme has to be expensive and time-consuming. To ease the application and ongoing management of your pension scheme, we offer the Lighthouse Pensions Trust as a straightforward, value for money solution. | View Profile

Setup Fees: From £950     Admin Fees: From £25/mth

The People's Pension

(5/5 from 1 review)

The complete pension package for small businesses

The People’s Pension is a multi-employer scheme with independent trustees and is operated on a not-for-profit basis. It’s a hassle-free, flexible and portable workplace pension designed for people, not profit. And it’s suitable for any organisation, large or small, in any sector. | View Profile

Setup Fees: £500     Admin Fees: Nil

About Workplace Pensions

Not too sure on your obligations regarding workplace pensions? The following short guide will walk you through the basics.

Workplace Pension law has changed. Under the Pensions Act 2008, every employer in the UK must put certain staff into a pension scheme and contribute towards it. This is called 'automatic enrolment'. The purpose of auto-enrolment is to get people saving for the future again. Even if you are a small business, workplace pensions apply to you.

How do workplace pensions work?

Millions of people are not saving enough to have the income they are likely to want in retirement.

Life expectancy in the UK is increasing and at the same time people are saving less into pensions.

In 1901 there were 10 people working for every pensioner in the UK. In 2010 there were 3 people working for every pensioner. By 2050 it is expected that this will change to just 2 workers.

The purpose of workplace pensions is to get get people saving for retirement through contributions deducted directly from their wages.If you qualify for auto enrolment then your employer also has to make contributions to the scheme by law.

It doesn’t matter what line of business you’re in, if you employ at least one person you are an employer and you have certain legal duties.

Workplace Pension Staging Dates/ Workplace Pension Start Dates

If you have 30 staff or fewer, you will have a precise staging date or start date allocated to you between now and April 1 2017, by which time you will need to have enrolled your staff into a workplace pension scheme.

Every employer has their own unique staging date and this date determines when your enrolment duties come into effect and it is set in law.

The Pensions Regulator will write to you to confirm your staging date (about 12 months in advance) but it’s best to know your staging date well in advance. If you don’t pay your staff through a PAYE scheme, your staging date will be April 1 2017.

To find out when your staging date is, you can visit the Pensions Regulator for more information.

www.pensionsregulator.com

You will need:

Your PAYE reference: This can be found on the letter you received from The Pensions Regulator about auto-enrolment and can also be found on your letter from the HMRC when you first registered as an employer, or you can find it on your payroll software.

Your Letter code: This is the 10-digit code on the letter you received from The Pensions Regulator about auto-enrolment.

Age and earnings: You will need to know the age and approximate earnings of everyone you employ.

Who Qualifies for Automatic Enrolment?

You are required to automatically enrol your employees into a workplace pension scheme if your employees:

  • Earn more than £10,000 per year – over £833 in monthly gross earnings,
  • Work in the UK, and
  • Are aged between 22 and the state pension age.

As an employer, it is your responsibility to assess your workers to determine whether or not they’re eligible to be automatically enrolled into a workplace pension or not.

A worker is defined as: “An individual who has entered into, or works under a contract of employment, or any other contract by which the individual undertakes to do work or perform services personally for another party to the contract.”

Generally, there are three types of workers – an eligible jobholder, a non-eligible jobholder and an entitled worker.

Eligible jobholder: Someone aged between 22 and state pension age earning over £10,000 who must be automatically enrolled.

Non-eligible jobholder: Someone aged 16 to 74 earning between £5,824 and £10,000 a year is ‘non-eligible’ but may choose to join a pension scheme to which the employer must contribute if they so wish. This also applies to workers aged 16 to 21 and over state pension age but not older than 74 who have earnings over £10,000.

Entitled worker: Someone earning £5,824 or less is entitled to ask to join a pension scheme but the scheme does not need to be a qualifying pension scheme and the employer is not obliged to contribute to it.

Auto Enrolment does not apply to you if:

  • You’re a sole director company, with no other staff
  • Your company only has a number of directors, none of whom has an employment contract
  • Your company only has a number of directors, one of whom has an employment contract
  • Your company has ceased trading
  • Your company has gone into liquidation
  • Your company has been dissolved
  • You no longer employ people in your home (cleaners, nannies etc.

How much are workplace pension contributions?

Employer Pays: Employee Pays The Government adds tax relief of: Total contribution
1.0% of your qualifying earnings until 6 April 2018 rising to 2.0% until 6 April 2019 then rising to 3.0% 0.8% of your qualifying earnings until 6 April 2018 rising to 2.4% until 6 April 2019 then rising to 4.0% 0.2% of your qualifying earnings until 6 April 2018 rising to 0.6% until 6 April 2019 then rising to 1.0% 2.0% of your qualifying earnings until 6 April 2018 rising to 5.0% until 6 April 2019 then rising to 8.0%

Need help working out how much your contributions will be? Try using this workplace pension calculator from workplacepensions.gov.uk

‘Qualifying earnings’ refer to earnings between £5,824 and £43,000 and that include the following components of pay:

  • salary
  • wages
  • commission
  • bonuses
  • overtime
  • statutory sick pay
  • statutory maternity pay
  • ordinary or additional statutory paternity pay
  • statutory adoption pay.

You must pay your contributions for each employee by the date you’ve agreed with your provider and you may be fined by The Pensions Regulator if you pay late or don’t pay the minimum contribution for each member of staff. You must also deduct contributions from your staff’s pay each month and you’ll need to pay these into your staff pension scheme by a date agreed with your pension scheme provider.

Once you have set up your scheme, you’ll need to complete a Declaration of Compliance five months after your staging date, which can be found on the Pensions Regulator website. It is absolutely crucial that you do this in order to comply with the law.

Make sure your chosen pension scheme is compliant with auto-enrolment and check that your payroll system can handle the change.

How to choose a workplace pension scheme

Pension schemes can only be used for auto-enrolment if they meet certain criteria which have been set out by auto-enrolment legislation. See this booklet for details of what to consider when choosing a scheme:

http://www.thepensionsregulator.gov.uk/docs/advisers-help-your-client-choose-a-pension-scheme.pdf

It might be you already have a workplace pension scheme which you contribute to. You need to check with your provider whether they comply with auto-enrolment legislation, enrol any employees not already benefiting from the scheme and notify the Pensions Regulator within 5 months with your Declaration of Compliance.

Whilst this information is around workplace pensions, which in effect means you have employees or maybe you are an employee reading this, don't forget about getting a pension even if you're self employed too.

If you have just come out of regular employment, you may already have a workplace pension scheme with contributions in already. Get the details of this scheme and either continue with it or select another which best suits your self employed status. If you are self employed it might be you need a scheme you can pay into as and when rather than regularly. Check to see if you can get a scheme with these benefits. The government scheme, NEST is now open to the self employed.

It is possible to opt out of your employer workplace pension scheme, you just need to complete a form which you get from your pension provider. By doing so you lose all access to the retirement benefits the scheme offers.

Further information on Workplace Pensions and Auto Enrolment

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