By Deborah Simpson, Director of Legal and Member Services, Voice
The Government has been running a high profile TV advertising campaign [above] about workplace pensions that appears to suggest that this affects nannies immediately – this is not the case.
The Government is ensuring that eventually all employers, no matter what their size, must offer their employees the opportunity to contribute to a workplace pension.
Employees will automatically be enrolled if:
- they earn over £10,000 gross per year with one employer;
- they are 22 or over;
- they’re under state pension age;
- they work in the UK; and
- they are not already enrolled in another suitable pension scheme.
This is being rolled out and does not come into effect for nannies until 1 May 2017 at the earliest.
Employers will have to comply on a roll-out basis depending when the nanny was first employed. 1 May applies to those employed before March 2013. Later starters will have later staging dates.
If you do not wish to be part of the pension scheme but meet the automatic enrolment criteria above, you will have to opt out.
If you do not meet the criteria but would like to be part of the scheme, you have the right to opt in, providing you earn over £5,824 gross per year.
Both employees and employers contribute to the scheme; contributions are based on a percentage of annual earnings.
If you change employers, your pension pot can be transferred, providing the new employer uses the same pension provider. If they do not, a new pot will be created for you. The first pot will remain dormant until you wish to access it.