New pension scheme to be launched

More people in the West Midlands to be automatically enrolled into a workplace pension.

A new Government advertising campaign is being launched to help make smaller businesses in the West Midlands aware of their duties to automatically enrol workers into a pension scheme.

There are around 410,000 small and micro businesses in the West Midlands. In the coming weeks, adverts fronted by Dragons’ Den star and entrepreneur Theo Paphitis will be broadcast across the country targeting smaller employers and their staff that Automatic Enrolment is right around the corner.

Over 47,000 large and medium-sized employers across the UK have already completed the process of automatically enrolling their workers across the UK. The focus has now shifted to the 1.3 million small and micro firms that will have to offer their staff a workplace pension between now and 2018.

Automatic Enrolment is part of the Government’s long-term economic plan, helping working people to start saving into a pension so that they may enjoy security and independence in their retirement. Minister of State for Pensions Dr Ros Altmann said, “With more than five million people automatically enrolled into a workplace pension, we have made great strides forward in a short space of time, but there is still much hard work to do.

“The switch to small and micro firms brings with it new challenges, which is why we’re working closely with business organisations and others to ensure they have the right level of support at every step of the way to help them through the process. Our long-term economic plan gives working people the chance to get on at every stage of their lives. This includes the dignity of a job, the security of a paycheque and a decent, well-earned retirement.”

Businessman and star of Dragon’s Den Theo Paphitis added: “It is less than three years since I first said that ‘I’m in’, and in that short period of time more than 5.2 million workers have been automatically enrolled into a workplace pension.

“Automatic Enrolment is proving to be a huge success, with clear long-term benefits for hardworking employees. Once they’re in, the overwhelming majority of people are choosing to stay in.”

Under Automatic Enrolment, employers and their employees, who are at least 22 and under state pension age and earn more than £10,000 a year, make regular contributions to a workplace pension scheme, unless they choose actively to opt out. The Government also contributes through a tax-break.

The process of enrolling staff kicked off with the UK’s largest businesses in 2012, and then moved to medium sized firms. Last month small and micro employers of between one and 49 workers started to automatically enroll their staff into a workplace pension. By the time the process is complete in 2018, up to nine million workers will be newly saving or saving more in workplace pensions.

Figures published earlier this year suggested that Automatic Enrolment is helping to turn around the decade-long decline in pension coverage, with 59 per cent of all employees now active members of a pension scheme, compared with just 47 per cent in 2012. People have the right to opt out, but 9 out of 10 are choosing to remain in with younger workers among the most likely to do so.