Chances are, you will have heard ‘workplace pensions’ mentioned in the media, which all employers legally have to set up for their employees over the next few years. This process is called ‘automatic or auto-enrolment’ and millions of people already now have one of these types of pension. Find out if this could apply to you and more about the way we look after our workplace pension here at Prudential.
Some employers already provide a company pension scheme as part of their employment package to help employees save for their retirement. These work by your employer paying into the scheme and usually topping up any contributions you may also make. These contributions are generally deducted directly from your pay (though sometimes are taken through salary exchange orarrangements). You may also get tax boosts for your company pension savings from the government.
Company pension schemes offered by employers are managed in two ways. Either under a trust, where trustees look after the pension plan in accordance with the scheme rules. Or nowadays, many employers arrange for a ‘workplace pension’ with a pension provider, such as Prudential.
All employers in the UK will have to meet the government requirements to help their employees save for retirement by 2018.
All employers in the UK will have to meet the government requirements to help their employees save for retirement by 2018 – with the rules applying to large employers first, and smaller employers later, as set out by the government. Whether you are entitled to a workplace pension will depend on you age and earnings. But your employer is required to give you details about the new ‘auto-enrolment’ rules when they apply to them.
So if you’re employed, and your employer hasn’t already told you about auto-enrolment (and you’re not already a member of your employer’s company pension scheme) you may want to ask them about when auto-enrolment will apply or for details about their scheme and if you can join.
Do workplace pensions apply to me?
Your employer will need to enrol you into a workplace pension scheme if you:
• Are not already opted into another company pension scheme, which they may offer.
• Are aged between 22 and State Pension age.
• Earn more than £10,000 a year.
• Work in the UK.
I’m already in a company pension scheme
If you’re already saving for your retirement in this way, you may want to check that your current payments will be enough to meet your income needs when you retire. It’s important that you consider taking professional financial advice as you plan your retirement, but our checklist and retirement income calculator might help.
How do I know my company pension offers good value?
If your employer’s scheme is set up under trust, thehave a duty to monitor the scheme, including checking it is value for money. To find out more about this, you should contact the trustees of your employer’s scheme.
Prudential Corporate Pensions Trustee Limited (PCPTL) is a corporate trustee company and acts as trustee for some employer’s schemes. Your scheme literature will let you know if this is the case for your employer’s scheme.
Find out more about PCPTL.
Or if your employer’s scheme is a workplace pension, since 6 April 2015, your pension provider must set up an Independent Governance Committee (IGC). Like trustees, an IGC has a duty to monitor the scheme, including also checking that it offers value for money.
Find out more about our Prudential IGC.
The government’s workplace pensions website is a good place to find out more about automatic enrolment.
You may also be aware that from April 2015 you have more freedom when it comes to taking your pensions savings.
So when considering your options as you approach retirement, in addition to seeking advice from a financial adviser, we recommend you access Pension Wise. This is a free and impartial service from the government and is available from age 50, online, over the telephone, or face to face.
Why do I need a pension?
A pension is designed to help you fund your retirement and replace the income you are no longer receiving from working.
What you may have heard about Pensions
After wide ranging changes introduced in April 2015, from age 55 onwards, you can now access your pension in more ways than ever before.
Tax benefits of saving in a pension
Saving in a pension is a tax-efficient way of building up an income for retirement.