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Pensions – Auto-enrolment is here…

Two important pieces of legislation came into effect this month – the new pensions provisions and an increase in the national minimum wage.

Of the two, it is the pensions provisions that will have the biggest impact on companies as, from 1st October, depending on the number of employees in your organisation, all businesses will have to auto-enrol eligible employees into a qualifying pension scheme.

Each employer will be given a date by the Pensions Regulator from which they must auto-enrol – this is known as your ‘staging date’.

From this date, you will have to auto-enrol eligible employees in a pension scheme when they reach the income tax threshold, although contributions will only kick-in from the employee threshold for national insurance contributions.

You will be allowed to operate a three-month postponement window for all employees so that employees on short-term contracts do not need to be auto-enrolled into the pension scheme. They can, however, choose to voluntarily opt-in during this postponement period.

Your ‘staging date’ will be based on the number of employees in your PAYE scheme as at 1st April 2012. Those companies with 120,000 or more employees will need to auto-enrol immediately; the staging date moves further into the future the fewer the number of employees with most small businesses not being effected until 2015 or beyond. Visit to view a table of ‘staging dates’.

Thus, for small businesses, whilst there is no need to panic, there is a need to start seriously thinking about pensions over the coming months with a view to developing a time-line from now to auto-enrolment and to consider the ultimate impact on your business.

Turnstone HR will be holding a seminar early in the New Year aimed at small businesses in order to make business owners more aware of their obligations and the practicalities under the Pensions Reform Act. This will also cover the various key definitions under the Act such as ‘eligible employee’, ‘qualifying scheme’ and ‘opting out’.

We are working closely together with Furness Independent Financial Advisors throughout the coming months on the issue of pensions so that we can provide the best possible advice. This means that Turnstone can discuss all the employment issues associated with the Act whilst FIFA will provide sound pensions advice.

Further information on this seminar will be posted in HR Talk and through the Evening Mail Business Section.
As mentioned earlier, the other key change that took effect on 1st October is the increase to the national minimum wage with the rate for workers aged 21 or over increased to £6.19. Full details of the changes can be found at

If you would like to learn more about the implication of pensions or the national minimum wage or if you have any issues relating to your HR or people management, please call Turnstone HR on 01229 615280 and speak to one of our HR Advisors or email us at We’ll be happy to help you.

“There is evidence to suggest that good HR practice and people management in SMEs are key factors in strong business performance and can lead to increased productivity.”

- CIPD people Skills Project 2017


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