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Auto enrolment

Auto enrolment is a policy set up by the government to ensure that as many employees as possible are placed into an occupational pension scheme.

It means that employers have to enrol certain employees into a pension scheme and make contributions towards it.

From June 2015 auto enrolment started to apply to those who are employing less than 50 people. This means that even if only one person is employed, the employer will be affected. This is the case even if the person employed is a family member or friend.

This can have implications for carers. If the person they are looking after is employing a personal assistant to provide care (often using direct payments from the local authority or the NHS), carers often help to manage the direct payments and/or the employment responsibilities. In some cases the carer themselves might be employed by the person they are looking after, even if they also provide a substantial amount of unpaid care.

Note: If a care worker is provided via an agency, and the agency is the care workers employer, then auto enrolment will not affect you.

The following information explains how auto enrolment affects employers, however if you are a carer being affected as an employee contact the Carers UK Adviceline for further information.

Note: This information applies to people living in England, Wales, Scotland and Northern Ireland.


What does auto enrolment mean for me as an employer?

Everyone who employs at least one person will have to take the following steps.

You firstly need to know your staging date (this is the date your auto enrolment duties apply to you). Your staging date should be on the letters you have received from the Pension Regulator about auto enrolment. You can also find out your staging date on the Pension Regulator website if you know your PAYE reference (which can be found on a P6/P9 coding notice or on your white payslip booklet P30BC). If you don’t pay your staff through a PAYE scheme then your staging date will be 1st April 2017.

Once you know your staging date you will need to work out whether your employees need to be auto enrolled. The Pension Regulator recommends that you do this about twelve months before your staging date.

Whether your employees need to be auto enrolled depends on their earnings (correct for 2016-2017) and their age:

  • If your employee earns over £192 per week (over £833 per month) and is aged from 22 to state pension age they must be auto enrolled.
  • If your employee earns over £192 per week (over £833 per month) and is aged from 16 to 21 or from state pension age to 74 they have a right to 'opt in'.
  • If your employee earns over £112 per week up to £192 per week (over £486 per month up to £833 per month) and is aged from 16 to 74 they have a right to 'opt in'.
  • If your employee earns £112 and below per week (£486 and below per month) and is aged from 16 to 74 they have a right to join a pension scheme. 

If your employee must be auto enrolled this means that you must put them into a pension scheme that can be used for auto enrolment and you must pay contributions.

If your employee has the right to ‘opt in’ this means that if they ask you must put them into a pension scheme that can be used for auto enrolment and you must pay contributions.

If your employee has the right to join a pension scheme this means that if they ask to be put into a pension scheme you must find a pension scheme for them but you do not have to pay any contributions.

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What do I have to do if any of my employees must be auto enrolled?

You will need to choose a pension scheme. The Pension Regulator recommends that you do this about six months before your staging date. The Pension Regulator website has some information on this.

You will also need to work out how much your contributions will be, and also work out if there will be any other costs involved in setting up a pension scheme. Before April 2018 you will need to contribute an amount equal to 1% of your employee’s gross earnings. This will rise to 2% from April 2018 and will rise again to 3% from April 2019.

Note: If you are in receipt of direct payments from the local authority or the NHS then these direct payments should cover any costs incurred in setting up a pension scheme and the cost of your contributions. You will need to speak to the local authority or the NHS to ensure that your direct payments cover such costs.

When your actual staging date arrives you have six weeks to enrol your employee with the pension scheme you have chosen and write to your employee explaining what has been done (ie that they have been auto enrolled, that contributions will be deducted from their wages and paid into a pension scheme and that they have a right to 'opt out' of the scheme if they want to). The Pension Regulator website has some template letters which you can use.

There are ongoing duties such as record keeping which you will need to comply with. The Pension Regulator website has some information on this.

You also have to complete a declaration of compliance (which you can do online) within five months of your staging date.

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What do I have to do if any of my employees have a right to ‘opt in’?

When your actual staging date arrives you have six weeks to write to your employees to let them know they have a right to ‘opt in’. The Pension Regulator website has some template letters which you can use.

If any of your employees do want to 'opt in' you have six weeks from the ‘enrolment date’ to enrol them into a pension scheme. See above for further information on choosing a pension scheme and working out your contributions.

Note: If you are in receipt of direct payments from the local authority or the NHS then these direct payments should cover any costs incurred in setting up a pension scheme and the cost of your contributions. You will need to speak to the local authority or the NHS to ensure that your direct payments cover such costs.

There are ongoing duties even if no employees are 'opting in' which you will need to comply with. The Pension Regulator website has some information on this.

You also have to complete a declaration of compliance (which you can do online) within five months of your staging date, even if no employees are 'opting in'.

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What do I have to do if any of my employees have a right to join a pension scheme?

When your actual staging date arrives you have six weeks to write to your employees to let them know they have a right to join a pension scheme. The Pension Regulator website has some template letters which you can use.

If any of your employees do want to join a pension scheme you have to find a pension scheme (which does not have to be one which can be used for auto enrolment) and make arrangements for them to join this pension scheme. You do not have to make any contributions to the pension scheme.

There are ongoing duties even if no employees are joining a pension scheme which you will need to comply with. The Pension Regulator website has some information on this.

You also have to complete a declaration of compliance (which you can do online) within five months of your staging date, even if no employees are joining a pension scheme.

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What will happen if I don’t comply?

If you don’t comply with your responsibilities under auto enrolment the Pension Regulator may take action. The Pension Regulator website has some information on this.

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Where can I get further advice?

You can use the Pension Regulator online ‘Duties Checker’ to work out what you need to do and when you need to do it.

You can contact the Carers UK Adviceline for further information; however we would be unable to find out your staging date for you.

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