To mark Pension Awareness Day in the UK this week, a double decker bus is making its way across the UK so people young and old can pop in to ask questions about their saving plans. The aim of the campaign is to alert the nation that it is not saving enough for retirement and to unite the financial services industry, businesses, employers and the government to share innovative ideas and to work together to drive engagement around saving for retirement.
Pensions can be hard to understand as an employee, but even harder to get your head around as an employer. Automatic enrolment is government legislation that requires all UK employers to enrol certain staff into a workplace pension scheme and make regular contributions. If you’re a small business owner, the ‘staging date’ for this may still be yet to come (if you chose to move your staging date to 2017), but for most of the nation, auto enrolment is now up and running. Figures published by The Pensions Regulator (TPR) have confirmed that 200,000 employers in the UK have now complied with their new workplace pension duties.
Help is at hand
Xero’s bespoke Payroll settings make it easy to oversee who among your workforce is eligible for what, and track pension contributions based on personal customisations. Pension calculations are then automatically made and deductions processed as part of a routine pay run. The minimum employee contribution is currently set at 1 percent, but is set to gradually increase to 3 percent in 2018.
Xero has been working closely with the government and its ‘Digital Strategy’. Part of that strategy involves the move to take tax returns online, and introduce quarterly reports rather than the traditional end of year dump. The online portal will effectively serve like an online bank account – allowing people to register for new services, update information and understand what needs to be paid, without having to fill out a tax return again.
In the spirit of moving things online
According to the UK Treasury, a pension dashboard prototype will be launched by 11 top providers in spring 2017. The dashboard will allow people to see all their pensions in one place, helping them keep track of their retirement savings and avoid the loss of pension money. Astonishingly, the Department for Work and Pensions estimates £400m worth of pensions savings are currently still unclaimed.
It’s clear that more of our lives are moving online, and as such, everyone has access to data in real time, so if you’re a business owner concerned with the intricacies of enrolling your employees in a pension scheme, or simply an employee keen to take control, the solution is to seek advice sooner rather than later, and avoid any unexpected shocks.
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