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This podcast selection is taken from a series of Business Hub radio shows broadcast on Star FM between February 2011 and October 2014 with advice from basic book-keeping through to crowd funding, directors loans, cashflow and a whole lot more!

There's something for everyone so do feel free to download and share - it might just be the golden nugget of information you need for your business to succeed!Listen at Star 107.9 FM

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Business Trouble - your choices

Are you prepared for workplace pensions?

The Business Hub Show - 23 February 2014

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Isha

I know you have talked about Workplace Pensions or Auto Enrolment a couple of times before Garry, but I see it is getting a lot of press now.

Garry

Yes, indeed, this is now becoming a very relevant and hot topic for all businesses, so I thought it would be worth talking about it again.
When we first discussed it a couple of years ago it all seemed a long way off and not so relevant, but now it is not long before all employers no matter what their size will have to have a pension scheme in place for their employees.

The frightening thing is that despite all the publicity there still seems to be a lot of ignorance about the changes.

Isha

So what exactly are workplace pensions?

Garry

Workplace pensions or Auto Enrolment is a scheme introduced by the Government which obligates all employers no matter what their size to provide and contribute to a pension scheme for their employees. The scheme must meet certain minimum standards to qualify as a “Qualifying Workplace Pension Scheme” or QWPS. The scheme has become popularly known as Auto Enrolment as the employer must automatically enrol all their employees whether they want to join the scheme or not.

If an employee does not want to be a member they must opt out. So the whole idea of the scheme is to get the maximum number of people into a workplace pension, as presently some 86% of companies in the UK with employees do not have any pension provision.

Isha

How much will this all cost?

Garry

The scheme will have to receive contributions from both the employer and the employee, and minimum levels are being set. These minimums start at just 2% of which a minimum of 1% must be from the employer, and these rise gradually until October 2018 when the minimum must be 8% of which a minimum of 3% must be from the employer. So the costs are pretty significant.

Added to that there is a very heavy administration burden which all employers must address, as getting this wrong will mean penalties and fines.

Isha

When do employers have to start their scheme?

Garry

The latest start date for employers are set by the number of employees on your payroll at April 2012 and your PAYE Payroll Scheme number. The largest employers have already started their schemes back in October 2012. The staging dates are then staggered based on the number of employees, and those with 50 employees and less start from 1st June 2015 and 1st April 2017. Where you are in that date range is dependent upon your PAYE scheme number.

The easiest way to find out your Staging Date is to look it up on the Pensions Regulator website where there is a lookup tool – where you enter your PAYE scheme reference to get your date. There is also a huge amount of other very useful information on that site.

However – your Staging Date is the date that you must have a scheme operating by, not when you need to start thinking about it!  So, the very strong recommendation is that you should start considering setting up your scheme at least six months or even longer before your Staging Date.  An issue which is brewing is that with so many schemes having to be set up in a relatively short time frame the scheme providers and advisors are already getting very busy, and there is a fear that they simply will not be able to cope when the smaller employers come on board.

Isha

So what should employers be doing now?

Garry

Definitely get up to speed with the whole process as quickly as possible and make sure you know your staging date. As I say that is easy to look up on the Pensions Regulator’s website.

After that you need to get yourself prepared and you should be looking to getting an advisor in place to help and assist you. That might be your Accountant or Financial Advisor.

The very strong advice here is don’t leave it too late – act now – your Staging Date is probably much sooner that you think.

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