Companies with less than 30 employees will fall under the Pensions Auto Enrolment legislations from 1 June 15. Presumably this will affect PSC's?
Small family businesses and people with a single employee such as a nanny will need to start paying into a pension for their workers in the next phase of a move to boost retirement savings.
From tomorrow, waves of firms with fewer than 30 employees will start to be phased into the Government's automatic enrolment scheme, which was set up amid fears that people are living for longer but are not putting enough money aside for their old age.
Around 14,000 small and micro businesses will be reaching their staging dates in June, with tens of thousands more coming on board over the next two years, according to the Pensions Regulator.
Auto enrolment: Small family businesses and people with a single employee such as a nanny will need to start paying into a pension for their workers in the next phase of a move to boost retirement savings
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Auto enrolment: Small family businesses and people with a single employee such as a nanny will need to start paying into a pension for their workers in the next phase of a move to boost retirement savings
Smaller firms such as hairdressers and grocers will be included as the scheme rolls out. In some cases, people may be employing just one person such as a nanny or a carer. Employers persistently ignoring their auto-enrolment duties could ultimately face fines.
The scheme started in autumn 2012, with the largest companies, which tend to have the most experience of pensions and explaining their benefits to workers, joining up first, followed by medium-sized companies.
More than five million employees have already been placed into workplace pensions and eventually as many as 1.3 million employers will have automatically enrolled up to 10 million eligible workers into a workplace pension scheme.
So far, the scheme has been hailed as a success, with around nine in 10 people who have been put into a pension choosing to stay in it. Employees have the right to opt out of the scheme but they must be enrolled into it before they can do so.
Employers are being brought into the scheme progressively and they can use their PAYE reference number to check exactly when they will reach their "staging date" - which is when their auto-enrolment duties come into effect.
By the time they reach their staging date, an employer should have everything in place and be ready to enrol their staff into their automatic enrolment pension scheme.
But some concerns have been raised about how micro employers will cope with the changes, which mean that firms will need to sign up workers aged between 22 years old and state pension age who are earning £10,000 or more.
Employers failing to comply with their duties could ultimately face a fixed penalty notice of £400. If they continue to ignore their duties, they face an escalating penalty of between £50 and £10,000 per day for failing to comply with a statutory notice. Larger companies will tend to face larger fines than smaller ones.
The Pensions Regulator said that so far, escalating penalties have only been used on a handful of occasions.
It said that it does not want to fine businesses and it wants to work with employers to help them meet their duties. Under auto-enrolment, a percentage of the employee's pay is automatically put into a pension.
The employer also contributes, with government contributions also being made through tax relief.
Cut price: Smaller firms such as hairdressers and grocers will be included as the scheme rolls out
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Cut price: Smaller firms such as hairdressers and grocers will be included as the scheme rolls out
Employers' minimum contribution rates into workplace pensions are being increased in stages. At present, employers must contribute 1 per cent of an employee's qualifying earnings, but from October 2017 this will increase to 2 per cent and from October 2018 it will increase again, to 3 per cent.
Tom McPhail, head of pensions research at Hargreaves Lansdown, said the pensions industry will need to deal with ‘huge numbers’ of employers in the next couple of years.
He said that between January 2016 and March 2018, the number of employers reaching their staging date will average more than 100,000 a quarter, reaching over 200,000 in the first few months of 2017.
McPhail added: ‘Many smaller employees are likely to be less well-prepared than their counterparts, so it is vital to plan ahead.
‘It is also important to note that for employees, this is just the start. The minimum contributions are not enough to buy you a decent retirement income so you should look on this as an opportunity to get to grips with a problem, rather than something which you can now forget about.’
The Pensions Regulator has said that ideally, employers should allow up to 12 months to prepare for auto-enrolment.
Employers need to set up a pension scheme and enrol their staff into it and they will also need to complete a declaration of compliance to confirm that they have met their automatic enrolment duties.
The latest phase of auto-enrolment is based on how many staff employers had in April 2012 and so some of these businesses may by now have more than 30 employees.
Tim Jones, chief executive of pension scheme Nest, said: ‘Nest was set up by the Government to be available for every employer, free of charge. Employers are giving their workers a helping hand to save for the future so we're committed to making it as easy as possible for them to do that.’
Employers can check their staging date using a tool on the Pensions Regulator's website at: Staging date calculator - know your date | The Pensions Regulator
Read more: Pension auto enrolment extended to firms with fewer than 30 employees | This is Money
Follow us: @MailOnline on Twitter | DailyMail on Facebook
Small family businesses and people with a single employee such as a nanny will need to start paying into a pension for their workers in the next phase of a move to boost retirement savings.
From tomorrow, waves of firms with fewer than 30 employees will start to be phased into the Government's automatic enrolment scheme, which was set up amid fears that people are living for longer but are not putting enough money aside for their old age.
Around 14,000 small and micro businesses will be reaching their staging dates in June, with tens of thousands more coming on board over the next two years, according to the Pensions Regulator.
Auto enrolment: Small family businesses and people with a single employee such as a nanny will need to start paying into a pension for their workers in the next phase of a move to boost retirement savings
+2
Auto enrolment: Small family businesses and people with a single employee such as a nanny will need to start paying into a pension for their workers in the next phase of a move to boost retirement savings
Smaller firms such as hairdressers and grocers will be included as the scheme rolls out. In some cases, people may be employing just one person such as a nanny or a carer. Employers persistently ignoring their auto-enrolment duties could ultimately face fines.
The scheme started in autumn 2012, with the largest companies, which tend to have the most experience of pensions and explaining their benefits to workers, joining up first, followed by medium-sized companies.
More than five million employees have already been placed into workplace pensions and eventually as many as 1.3 million employers will have automatically enrolled up to 10 million eligible workers into a workplace pension scheme.
So far, the scheme has been hailed as a success, with around nine in 10 people who have been put into a pension choosing to stay in it. Employees have the right to opt out of the scheme but they must be enrolled into it before they can do so.
Employers are being brought into the scheme progressively and they can use their PAYE reference number to check exactly when they will reach their "staging date" - which is when their auto-enrolment duties come into effect.
By the time they reach their staging date, an employer should have everything in place and be ready to enrol their staff into their automatic enrolment pension scheme.
But some concerns have been raised about how micro employers will cope with the changes, which mean that firms will need to sign up workers aged between 22 years old and state pension age who are earning £10,000 or more.
Employers failing to comply with their duties could ultimately face a fixed penalty notice of £400. If they continue to ignore their duties, they face an escalating penalty of between £50 and £10,000 per day for failing to comply with a statutory notice. Larger companies will tend to face larger fines than smaller ones.
The Pensions Regulator said that so far, escalating penalties have only been used on a handful of occasions.
It said that it does not want to fine businesses and it wants to work with employers to help them meet their duties. Under auto-enrolment, a percentage of the employee's pay is automatically put into a pension.
The employer also contributes, with government contributions also being made through tax relief.
Cut price: Smaller firms such as hairdressers and grocers will be included as the scheme rolls out
+2
Cut price: Smaller firms such as hairdressers and grocers will be included as the scheme rolls out
Employers' minimum contribution rates into workplace pensions are being increased in stages. At present, employers must contribute 1 per cent of an employee's qualifying earnings, but from October 2017 this will increase to 2 per cent and from October 2018 it will increase again, to 3 per cent.
Tom McPhail, head of pensions research at Hargreaves Lansdown, said the pensions industry will need to deal with ‘huge numbers’ of employers in the next couple of years.
He said that between January 2016 and March 2018, the number of employers reaching their staging date will average more than 100,000 a quarter, reaching over 200,000 in the first few months of 2017.
McPhail added: ‘Many smaller employees are likely to be less well-prepared than their counterparts, so it is vital to plan ahead.
‘It is also important to note that for employees, this is just the start. The minimum contributions are not enough to buy you a decent retirement income so you should look on this as an opportunity to get to grips with a problem, rather than something which you can now forget about.’
The Pensions Regulator has said that ideally, employers should allow up to 12 months to prepare for auto-enrolment.
Employers need to set up a pension scheme and enrol their staff into it and they will also need to complete a declaration of compliance to confirm that they have met their automatic enrolment duties.
The latest phase of auto-enrolment is based on how many staff employers had in April 2012 and so some of these businesses may by now have more than 30 employees.
Tim Jones, chief executive of pension scheme Nest, said: ‘Nest was set up by the Government to be available for every employer, free of charge. Employers are giving their workers a helping hand to save for the future so we're committed to making it as easy as possible for them to do that.’
Employers can check their staging date using a tool on the Pensions Regulator's website at: Staging date calculator - know your date | The Pensions Regulator
Read more: Pension auto enrolment extended to firms with fewer than 30 employees | This is Money
Follow us: @MailOnline on Twitter | DailyMail on Facebook
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