Pensions

Pensions provide a safety net when employees are no longer at the age where they want to work and would like more money than that provided by the state pension (assuming they are eligible), it is a legal requirement for employers to offer their staff a workplace pension. Pension plans have previously been subject to theft, such as when in 2003 Robert Maxwell plundered £480M from the pensions of his staff, at the time of writing (Feb 2022) there was a reported £510M deficit from the Arcadia group fiasco.

 

Luckily there is a national scheme set up by the government called the NEST pension scheme. To be eligible (according to the Pensions Act 2008) staff must be between 22 and 68 years old and earn more than £10,000 within the pay reference period (this is typically a year). This is safer than a pension held by an employer and gives them some certainty that if something does occur, they will be able to provide for their families when the time comes.

 

The terms and conditions of the pension scheme vary, they may be defined contribution or defined benefit pensions depending on what is offered at your place of work. If you do not classify for the pension scheme using the criteria above then you may choose to voluntarily enrol into it (your employer cannot stop you from doing so).

 

Employers are obligated to pay a minimum amount of money into this type of pension every month. They will allow you to leave the pension scheme (an opt-out) if you want. They will also refund you the money you may have added to your pension if you opt-out within 1 month.