A Private Members’ Bill to help millions save more into their pension and start saving sooner has cleared Parliament and been granted Royal Assent. Royal Assent means the legislation within the bill will come into effect, although we don’t at this stage know when.
You will be familiar with Automatic Enrolment, the landmark pensions policy which sees eligible employees made members of their workplace pension scheme without needing to ask. The new Bill, introduced in the House of Commons by Jonathan Gullis MP and taken through the House of Lords by Baroness Altmann, creates powers to scrap the lower earnings limit and reduce the age when Automatic Enrolment is required.
This will affect all businesses in the UK, most notably as follows:
- The minimum age for future automatic enrolment will reduce to 18. It is currently age 22.
Many employers and employees will need to increase the amount they pay into their pension because:
- The minimum pension contributions will need to be calculated from the first pound earned. Many employers calculate pension contributions when earnings reach £6,240 and not below. This is known as Qualifying Earnings.