A workplace pension is a method of saving for your retirement that’s arranged and managed by your employer. Other names for a workplace pension can be occupational, works, company or work-based pensions. You will pay a percentage into the pension and your employer will also add a percentage into the scheme for you.
All employers must provide a workplace pension scheme, which is called automatic enrolment.
Your employer must automatically enrol you into a pension scheme and make contributions to your pension if all the following apply:
- you’re classed as a ‘worker’
- you’re aged between 22 and State Pension age
- you earn at least £10,000 per year
- you usually (‘ordinarily’) work in the UK
Your employer must inform you when they have automatically enrolled into their workplace scheme. They will inform you:
- the date they added you to the pension scheme
- the type of pension scheme and who runs it
- how much they’ll contribute and how much you’ll have to pay in
- how to leave the scheme, if you want to
- how tax relief applies to you
You can leave the scheme or ‘opt out’ anytime. If you opt out within a month of being added to the scheme, you’ll get the money you’ve already paid in. If you opt out later, you will usually stay in the pension until you retire or transfer to another pension scheme.
You will need to contact your pension provider if you wish to opt out. Your employer will tell you how to do this.
For more information on Workplace Pensions, please contact us.