You may have seen the ads on TV recently – “We’re all in!” and all of that. These ads portray the government’s new legislation which requires employers to automatically enrol their employees into a pension scheme over the next few years. This will affect all workers that are;
- Aged between 22 and State Pension Age
- Earn at least £10,000 a year
- Work in the UK
The real benefit of this scheme is that, if you decide to partake in it (employees can opt out if they wish), your employer must contribute when you do and the government also offers a contribution in the form of tax relief. This makes it a very effective scheme for those that wish to start a pension and if you qualify, you should speak to your employer about this if they’ve not provided you with any information already.
A nice illustration of how this pension scheme can work for you has been provided by the government:
You put in £40, your employer puts in £30 and the government contributes £10 via tax relief. That means a total of £80 will be paid into your pension.
Pensions are a boring thing to think about, especially if you are young, however they can be vital to providing a comfortable life for when you decide to kick back and retire. For more information on this go take a look at Government Workplace Pensions.