TIME TO THINK ABOUT PENSIONS
Creative business consultant Zena Bruges explains why you shouldn’t be retiring about retirement
You and your team are young, creative and carefree; the last thing you want to think about is pensions. This, however, would be a mistake – as you could end up breaking the law.
Since the Pensions Act 2008 came into effect in 2012, every UK employer is required to put certain employees into a pension scheme and make a contribution, a process called Auto-Enrolment. Big employers with thousands of staff had to act immediately, but smaller employers such as 99 per cent of British businesses, and therefore most design studios, were given at least two years before having to introduce it. So naturally, with many more interesting things to do that seemed more urgent, most people forgot all about it.
Now, however, the deadline for firms with 30 employees or fewer to enrol in a qualified pensions scheme is fast approaching. There’s no need to panic quite yet, however, as it’s a staged process which began back in 2015 and will end in April 2017.
The first thing to do is dig out your PAYE reference number and go to the Pensions Regulator website (www.bit.ly/pensions_staging) to check your company’s staging date. Chances are it hasn’t come yet, and even if you’ve missed it all is not lost – if you notify the Pensions Regulator immediately, they’ll explain what you need to do to catch up.
Once you know the date, you need to figure out what the damage is so you can budget for the extra cost to your business. As it stands, Employer Contribution rates are set at one per cent of earnings until 6 April 2018, two per cent until April 2019, and rise to three per cent after that.
So how do you get started? There are two options for setting up a qualifying auto-enrolment pension scheme. The first is to use NEST, the National Employment Savings Trust set up by the government specifically to help the process of auto enrolment. NEST can manage the monthly pension contributions for both employers and employees, and while it may not be as slick as some private systems, it works and – even better – it’s free to use.
Your second option is to go private. If you already have a workplace pension plan in place, your provider can adapt it to suit the new autoenrolment requirements. But if you don’t have one set up yet, rest assured that all of the main pension providers are currently biting employers’ hands off to be able to guide them through the whole process – albeit at a price, of course.
Worry lines can be dreadfully aging, so hopefully this quick guide has taken some of the stress out of setting up a pension plan for your studio – or at least reminded you that it needs to be done. With fines of up to £10,000 for those who do nothing, it’s something that needs looking into.
What other challenges have you faced when setting up your studio? Tweet your thoughts to @ComputerArts using #DesignMatters