The Teachers’ Pension Scheme is an auto-enrolment scheme. This means that as soon as you enter teaching in a state school, you will be enrolled in the pension. The teachers’ pension contributions may feel steep when you first start teaching. However, the benefits of the scheme are unquestionable because while you contribute to your pension fund, so does your employer.
Some teachers also take on additional roles outside of school. Some teachers are examiners or writers, or they offer services to tutoring companies. Since the introduction of the Pensions Act 2008, every employer in the UK must enrol certain employees into a pension scheme. Currently, this auto-enrolment applies to people earning over £10,000.
Targeting those who do not enrol employees
As with the Teachers’ Pension Scheme, enrolment in other work-based pension schemes is beneficial because the employer must contribute too. This is an added expense for companies and so for some has been an obligation they have sought to avoid.
Employers are now being targeted for compliance checks by The Pensions Regulator (TPR). The inspectors use data to identify those employers who may be breaking the law regarding pension contributions. When an inspection is requested, it is mandatory for employers to take part, and the blocking of such an investigation is considered a criminal offence.
The consequences for failing to auto-enrol
TPR acknowledge that most companies are doing the right thing and ensuring qualifying employees are enrolled. However, the organisation is making use of data and intelligence streams to detect those failing to offer appropriate pension contributions. The enforcement action can include a fine.
If individuals feel they should be auto-enrolled in a work-based pension and therefore making pension contributions, it is essential to seek advice. Planning for retirement and ensuring you can live comfortably after work has finished will rely on making a financial contribution now.
The content in this article was correct on 23rd June 2019. You should not rely on this article to make important financial decisions. Teachers Financial Planning offers advice on pensions for teachers and non-teachers. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.