All employers, no matter the size, need to automatically enrol eligible employees into a pension scheme
Automatic enrolment or auto enrolment began in October 2012 and means that all employers, no matter the size, will need to automatically enrol eligible workers into a pension scheme and make contributions towards it.
As a society we’re living longer, and as such the relationship between those in work, and those retired, is changing dramatically.
In 1901 there were 10 people in employment for every 1 retired. This had reduced to just 4 to 1 in 2005, and is anticipated to further reduce to only 2 to 1 by 2050.
And yet in 2012, only 1 in 3 private sector workers were in a pension scheme, and the trend’s been downwards for the past 40 years.
The combination of this change and the fact that millions in employment are dramatically under-saving for their retirement, will cause a serious problem, hence the introduction of these reforms.