From October this year, employers will enrol workers into a workplace pension, if they meet the following criteria:
- are not already in a pension at work
- are aged 22 or over
- are under State Pension age
- earn more than £8,105.00 a year
- work in the UK
Why this is happening
People are living longer. You could be retired for 20 years before you die, and you need to think about how you’ll fund it.
The government is getting employers to enrol their employees automatically into a workplace pension, so it’s easier for people to start saving money towards their retirement.
Benefits of staying in a workplace pension
A pension is a way of saving money to provide you with an income when you retire.
There are many benefits to having a pension at work:
1. Your employer will pay into it – the contribution your employer pays tears your workplace pension can contribution from your employer means your pension can build up much quicker than if you were saving for your retirement on your own.
2. The government will also pay into it, in the form of tax relief – so out of your paid salary, a portion of it, which should be taxed will instead go into your pension instead.
3. Your workplace pension belongs to you, even if you leave your employer in the future.
4. Being in a workplace pension is an important step towards giving yourself the lifestyle you would like in later life. The State Pension is a foundation for your retirement and amounts to just £107.45 in the tax year 2012/2013 a this figure will obviously change every year, but it’s clearly not enough to live a jet-set life in your retirement. If you want to have more money when you retire, you should consider contributing to a workplace pension.
To find out how much the government will pay out, visit: Directgov.uk