How does Auto Enrolment affect the employee?
If you’ve worked for a large organisation chances are you’ve benefited from being able to join a company pension scheme. So you’ll be familiar with the idea of saving from your pay packet into a pension scheme with a limited choice of funds.
But for the millions working in micro and small businesses it will be the first opportunity to join a low cost pension scheme. Over the next 3-4 years all employees will have the opportunity to join a pension scheme with much lower charges than those offered in the past by financial advisers.
Both your employer and the government will contribute to the Auto Enrolment scheme.
But it will mean reduced take-home pay. Although your employer will make contributions, you will also be expected to pay a minimum of 4% into the fund after tax. … Read More »