Whether it’s from the ‘we’re all in‘ advert on television or from friends and family, you’ve probably heard about pension auto-enrolment at some point. But as a contractor or freelancer, you may be wondering if it affects you. We’ve done our research and brought you the facts on auto-enrolment for your convenience – act now to avoid missing staging dates!
What is Auto Enrolment?
Pension auto-enrolment was introduced in 2012 by the government in a bid to close the gap between what we should be saving for our later years versus what we’re really putting aside. The scheme sees employers and the government contributing towards your pension fund in addition to your own contributions.
Does it Affect Small Businesses & Contractors?
If you’re the owner of a small business and its sole employee, then it’s good news: the impact auto-enrolment has on you will be minimal. This is because, technically speaking, as the only employee you don’t fall within the criteria for auto-enrolment. This could, however, change in the future.
The story is the same for contractors and freelancers as you won’t be auto-enrolled under the site where you’re working; as your services are leased out through your company, it’s you who will be responsible should the rules change.
If you’re working under umbrella companies, however, are treated differently. Because the umbrella company is really just a payroll provider, you’ll have to make all payments yourself without contribution from them.
When Will I Be Enrolled?
Now the ‘auto’ in ‘auto-enrol’ isn’t actually as automatic as you may think. Over the last few years, different businesses and individuals falling into different criteria have become eligible for enrolment on particular staging dates; by now, most contractors should be auto-enrolled. If your limited company gains an employee, you’ll be responsible for registering the auto-enrolment.
