The way people are funding their retirement is changing. It may not sound exciting but auto-enroling employees into pension schemes has been hailed as a ‘pensions revolution.’
Large companies with 250 workers plus have started adopting the scheme years ago and more than 11,000 employers have automatically enrolled over 3 million staff into workplace pensions.
Now smaller companies are following suit and even bigger numbers are still to come. The government believes nine million people will soon be newly saving or saving more through auto-enrolment.
What are workplace pensions?
A work place pensions is a simple step to a financially secure future. When you contribute your employer and the government will too.
It is a way of saving for your retirement, arranged by your employer, so you don’t need to worry about financially securing your future.
The money you get from a workplace or other pension give you the increased flexibility you need when you retire.
A new law means that every employer must automatically enrol workers into a workplace pension scheme if they:
- are aged between 22 and State Pension age
- earn more than £10,000 a year
- work in the UK
How do they work?
You make a small contribution, a percentage of your pay which is automatically put into the pension scheme every payday.
In most cases, your employer and the government also add money into the pension scheme for you. The money is used to pay you an income for the rest of your life when you start getting the pension.
You can’t usually access the money before you’re 55 at the very earliest – unless you’re seriously ill.
You can usually get some of your pension as a tax-free lump sum when you retire and if the amount of money you’ve saved is relatively small, you might be able to access it as a lump sum. 25% is tax free but you’ll have to pay Income Tax on the rest.
Today the maximum basic State Pension you can get is £113.10 per week for a single person.
Pensions and Milestone’s Employees
If you’re a Milestone employee you can be enrolled in the NEST, National Employment Savings Trust, pension scheme.
If you would like to know more about NEST you can visit their website at www.nestpensions.org.uk or search online for NEST pensions.