By Siobhan Mail, Director and pensions expert at Seer Green Financial Planning

The biggest change to the UK pensions system in a generation will be rolled out this year – affecting every single business in Wales.

Auto-enrolment means every working person aged 22 and over and paying tax will HAVE to be signed up by his or her employer into a workplace pension scheme.

It’s a revolution that will provide the majority of the 13 million people in the UK who would otherwise have retired with just the state pension to survive on, with a viable and valuable second source of income.

It will not be popular among some employees because they will eventually have to contribute a minimum of four per cent of earnings each month into a scheme. It will be unpopular with employers because they face the double whammy of contributing a minimum of three per cent of the value of the employee’s qualifying earnings (including any bonuses, overtime payments etc) PLUS the headache of having to administer the pension scheme for every single staff member.

At this stage, the employee will have the right to opt out of auto-enrolment. However, this opt-out clause is widely expected to be quickly withdrawn, making an occupational pension scheme compulsory for all.

Auto-enrolment goes ‘live’ from October 1 when all big businesses of 800-plus employees will have to provide a workplace pension scheme to all staff – by law. The following year will see companies with workforces of between 250 and 799 signing up to the new scheme, with businesses of up to 249 staff joining in sometime in 2014.

There is no doubt the vast majority of businesses are not geared up for this. Many will not even have thought about it – let alone considered the implications, both financially and administratively to ensure they remain compliant with the law, which will carry heavy penalties for those who flout it.

We have been working with and preparing clients for this for the last 12 months and already have a unique software system in place that will make life a lot easier for employers when it comes to them having to administer a workplace pension scheme.

We know planning ahead for something like this is not yet on the radar for many businesses, but auto-enrolment is one issue where they cannot afford to be reactive at the last minute – otherwise they will pay heavily for the lack of preparation.

Gwent-based leading pensions and financial planning specialists Seer Green are experts in the field of auto-enrolment. Contact Siobhan Mail, Director, on Newport 01633 816522; email

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