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Covid-19 and pension auto-enrolment

How has Covid-19 impacted pension auto-enrolment?

Coronavirus has impacted working life in unprecedented ways. Naturally, employers want guidance during these challenging times. In this blog post, we will answer the most common questions circulating in relation to pension auto-enrolment for furloughed staff including what is expected of employers during the Covid-19 pandemic.

Do I need to continue making employer contributions to pensions?

Yes, The Pensions Regulator has made it clear that auto-enrolment contributions should continue as normal. This is the case for both furloughed and working staff.

Is there help available to help make employer pension contributions?

If a staff member is furloughed, the Coronavirus Job Retention Scheme (CJRS) permits employers to claim the statutory minimum employer pension contribution on their wages. This strictly equates to 3% of their qualifying earnings. Qualifying earnings refer to total earnings received prior to tax between £6,240 and £50,000 for the 2020/21 tax year.

What happens if I make a late payment?

As an employer, you are still expected to carry out your responsibilities as before, however, The Pensions Regulator is providing slightly more flexibility when it comes to payments. The deadline for reporting employer late payments across their schemes has been extended from 90 days to 150 days, in order to give employers more ability to meet payment requirements.

What will happen to pension values?

Naturally, the global pandemic has had an impact on the stock markets and is predicted to have influence for some time. Employees not due to retire for some time can reasonably expect their pension pot to have sufficient time to recover. If you are looking to retire in the near future, then you would be best served discussing your case with an experienced financial advisor.

In such turbulent times when potential changes in pension regulation may come at any moment, it is more valuable than ever before to have a payroll specialist on your side. Choosing us as your payroll partners is the easiest way to remain compliant and stress free. To learn more, please don’t hesitate to get in touch with us today on 02382 023223.

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DE, Accountant

“In 2014 we outsourced our payroll to Essential Payroll and our experience has been excellent. We run a very demanding payroll with over 600 employees in an industry that has a high turnover of staff. Essential Payroll manage this brilliantly. They go above and beyond to meet our deadlines and liaise with us regularly. Essential Payroll offer a friendly, helpful and informative service that we would thoroughly recommend.”

Commercial Cleaning Company, Hampshire (615 employees)

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Care Home Group, Dorset (500 employees)

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Bar/Restaurant Group, Dorset (75 employees)

“Dorset Commercial Cleaning have worked with Essential Payroll since we started the business three years ago. I can honestly say I wouldn’t know how we’d live without them. Their expertise and guidance was fundamental to us setting up an efficient and swift payroll system and their flexibility and helpful attitude over the last three years has allowed us to concentrate on delivering outstanding service to our clients safe in the knowledge that payroll is happening perfectly."

James Lattimer, Dorset Commercial Cleaning

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