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The AE Fast-Track Blog


Our latest Blogs about Auto-Enrolment

Workplace Pensions and Cost Reduction
If you’re a small business owner with one or more employee, then workplace pensions will no doubt be on your mind!   If you haven’t yet reached your deadline (or Staging Date) for setting up your workplace pension scheme, give yourself plenty of time to address the crucial decisions you’ll need to make around pension scheme provider and pension scheme design.  These two issues are critical for your business and your employees – decisions you make now will have a significant impact on your employees’ pension funds and your own costs as a business owner.

Consider what’s best for your employees

It almost goes without saying that choosing the right pension scheme is a huge responsibility for an employer – get it right and your employees will enjoy a more comfortable lifestyle in their retirement.  If you rush this decision and choose a scheme without doing the necessary research into employee charges, compliance, fund performance and asset-backing, there’s a good chance that your employees will be worse off than they might have been.

Consider what’s best for your business

You have important choices to make around scheme design too – decisions made now will continue for the duration of the pension scheme and will undoubtedly impact on your business costs. 

One area of scheme design that is incredibly useful is ‘postponement’.  Employers are able to postpone the enrolment of employees for up to three months in three different circumstances:

At your Staging Date
For new employees
For existing employees who become eligible

Postponement from your Staging Date is recommended to ensure that your payroll administration fits seamlessly into the process, and you’ll delay the onset of contribution costs for a couple of months.

Where postponement comes into its own is for new employees.  Without postponement, eligible employees will be enrolled immediately but will take your employer contribution with them if they leave within the first three months of employment.  Postpone enrolment for three months and, if the employee has left by month 3, you haven’t lost your employer contribution.  Significant savings can be made if you employ seasonal or temporary staff. 

A robust Pension and Postponement Policy can accompany your employment contracts so that your new employees are fully informed of their pension options, and statutory postponement letters must be issued within 6 weeks of eligibility.

Getting the right advice about workplace pensions is important for employers and employees alike.   If you would like to talk through your circumstances with an auto-enrolment expert, please give us a call on 0800 160 1233.  We’ve got lots of useful information and guidance on our website if you need it:

I don’t think any of my staff are eligible for Auto-Enrolment, do I need to do anything?

If you have one or more employees, you will need to assess their age and earnings every payroll run from your staging date (and keep a record of this) and categorise them as Eligible Jobholders, Non-Eligible Jobholders or Entitled Workers.


  • An Eligible Jobholder is aged between 22 and State Pension Age, earning over £10,000 a year.  They must be automatically enrolled.


  • A Non- Eligible Jobholder is aged between 16 and 22, or State Pension Age and 75, OR, a Non-Eligible Jobholder may earn between £5,824 and £10,000 a year.  They can opt-in to your workplace pension scheme.


  • An Entitled Worker earns below £5,824 a year.  They won’t be enrolled and they can’t opt into your workplace pension, but they can pay their own contributions into a scheme.


  • You do not have any pension duties for employees outside of the 16-75 age range



If you don’t have any eligible jobholders, you may still have to jump through some auto-enrolment hoops to keep The Pensions Regulator happy…

If you only employ non-eligible jobholders and/or entitled workers, you will still need to send statutory letters to your employees at your staging date to let them know how auto-enrolment affects them and what action they can and can’t take. This is a legal requirement and you need to keep a formal record of the letters you send and when you sent them.   Non-eligible jobholders have the right to opt-in to your scheme, even if you haven’t set one up yet, and you will need to start paying contributions for them.  If they do opt-in, you’ll have to move pretty quickly to set up a scheme within six weeks!   


 If you’re sure that your non-eligible jobholders don’t want to opt-in to your pension scheme, then there is no requirement for an employer to have a scheme in place (but you mustn’t discourage them from opting in).  Having said that, it’s a good idea to set up a pension scheme if you suspect that a non-eligible jobholder is likely to opt-in, or if they might become an eligible jobholder in the near future, so that you don’t have to rush into it later.  


Don’t forget your Declaration!

All employers will need to declare their compliance with The Pensions Regulator within five months of their staging date, whether or not you’ve had to set up a scheme.  Don’t forget to do this, otherwise you’ll be liable to a £400 fine from The Pensions Regulator.


The declaration can’t be completed prior to your staging date, and it must be completed online via The Pensions Regulator’s website:-

If you think you might need to set up a scheme, or would like to talk through your circumstances, please give us a call on 0800 160 1233.  We’ve got lots of useful information and guidance on our website if you need it:


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