Work­ers en­rolled for pen­sion scheme

Rutherglen Reformer - - Intimations -

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 work­pla­cepen­sions

Sav­ing for re­tire­ment Many work­ers will now be au­to­mat­i­cally en­rolled for their work­place pen­sion scheme

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