Workers enrolled for pension scheme
Millions of workers are being automatically enrolled into a workplace pension by their employer.
Once you’re enrolled, not only will you pay into it but so will your boss and the government.
A workplace pension is a way of saving for your retirement that’s arranged by your employer.
Some workplace pensions are called‘occupational’,‘works’, ‘company’or‘work-based’ pensions.
A percentage of your pay is put into the pension scheme automatically every payday.
In most cases, your employer also adds money into the pension scheme for you, and you get tax relief from the government.
When you can take your pension pot depends on your pension scheme’s rules - it’s usually 55 at the earliest.
What you’ll get and how you can take it depends on the type of scheme your employer offers you.
You can usually take 25 per cent of the money tax free.
If the amount of money in your pension pot is quite small, you may be able to take it all as a lump sum - 25 per cent would be tax free but you’d pay Income Tax on the rest.
You can get money from a workplace or other pension on top of the State Pension.
Today, the maximum basic State Pension you can get is £115.95 per week for a single person.
A new law means that every employer must automatically enrol workers into a workplace pension scheme if they are aged between 22 and State Pension age; earn more than £10,000 a year and work in the UK.
This is called‘automatic enrolment’.
Use the Pensions Regulator staging date calculator to check if the new law applies to you and when you’ll be enrolled.
The calculator is for employers but also works for employees.
You may not see any changes if you’re already in a workplace pension scheme.
But if your employer doesn’t already contribute to your pension, they will have to start when they‘automatically enrol’ every worker.
You may be able to nominate someone to get your pension if you die before reaching the scheme’s pension age.
You can do this when you first join the pension or by writing to your provider.
Ask your pension provider if you can nominate someone and what they’d get, eg regular payments or lump sums. Check your scheme’s rules about: who you can nominate – some payments can only go a dependant, eg your husband, wife, civil partner or child under 23; whether anything can change what the person gets, eg when and how you start taking your pension pot, or the age you die.
You can change your nomination at any time. It’s important to keep your nominee’s details up to date.
Sometimes the pension provider can pay the money to someone else, eg if the person you nominated can’t be found or has died.
Most pension schemes set an age when you can take your pension, usually between 60 and 65. In some circumstances you can take your pension early. The earliest is usually 55. How you get money from your pension depends on the type of scheme you’re in.
You can find our more from https://www.gov.uk/ workplacepensions