June 3 2016.

Over the past four years, the old-age pension system in the UK has been transformed. In the June isue of MOTORCYCLE TRADER - landing soon - Nathan Long explains what has changed, the new freedoms, and what you need to know.

"In October 2012, the starting gun was fired on the workplace pension revolution. Known as auto-enrolment, its aim is to ensure we all have enough income to live on when we get old. The early signs are encouraging, but we won’t truly know how successful it has been for many years yet.

"Auto-enrolment provides a starting point for retirement preparation; employers enrol their eligible staff into a company pension and contribute to it. Staff aged 22 and state pension age are eligible, earning the equivalent of £10,000 a year or more. The contributions start low (just two per cent in total with at least one per cent from the employer) but reach a total of eight per cent by 2019 (of which at least three per cent must come from the employer).

"Employees can opt out but not before they are enrolled, emphasising that saving for retirement is the default. Those who miss out can still ask to join and could be entitled to contributions too. While auto-enrolment started with the largest employers, in the continued roll-out, small employers must tackle workplace pensions too."

The first step for employers is to find out by when they must comply. Failure to do so can lead to fines of £50 to £10,000 per day. Employers can find out their start date by visiting the Pension Regulator’s website HERE armed with their payroll reference number.

Read more on this subject in the June issue of MOTORCYCLE TRADER.