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Nannywage Ltd Automatic Enrolment Pensions
in association with NEST
Switching from your current payroll
provider to Nannywage Ltd (click here)

Automatic Enrolment Pensions

All UK based employers must now provide a pension scheme for their workers, known as Automatic Enrolment Pensions at the start of employment of the employee.

For the complete guide to Automatic Enrolment workplace pensions, how they work and what Nannywage Ltd pensions do to ensure you comply with the pension regulations as an employer - click here

By law you may postpone the pension scheme set up for 3 months from employment start date, this is a useful option as it gives you the time to decide if your new worker is for you before you commit to enrolling them into a pension scheme.

If the employee qualifies, the employer must automatically enrol them into their pension scheme.

The criteria for automatic qualification enrolment are:

If the employee does not qualify, they still have the right to opt-into your pension scheme.

If the employee wishes to opt in and earns below qualifying earnings called the Lower Earnings level the employer is not required to contribute.

If the employee wishes to opt in and earns above Lower Earnings Level upto the qualifying earnings the employer is required to contribute.

Nannywage Ltd set up your pension scheme. Assuming you choose to use NEST (National Employment Savings Trust) the government pension scheme.

If you subscribe to our pension service, we complete all compliance on your behalf. We set up a NEST pension scheme on your behalf and administer the pension contributions.

If a non-qualifying worker does not wish to opt-in, you do not need to set up a pension scheme.

However, all The Pension Regulator knows about you is that you are a HMRC employer. As an employer you must inform The Pension Regulator of your pension circumstances by completing The Declaration of Compliance with The Pension Regulator within 5 months of employment start date or face heavy non-compliance fines starting at £400.

If you subscribe to our pension service with a one-off fee for non-qualifying not-opt in employees, we complete all your compliance.

If at a future date a pension scheme is required the fee also covers first year pension service.

Nannywage Ltd pensions give you the choice to complete your own Declaration of Compliance with The Pension Regulator, if your employee does NOT qualify or wish to opt-in. Unlike many payroll providers who charge you a pension service subscription even if you do not require a pension scheme at this time and charge you to assess your employees each pay day to see if your employee now qualifies.

If you choose to complete your own Declaration of compliance as you have no qualifying employees and do not require pension set up. Nannywage Ltd pensions DO NOT charge you any pension service subscription but has no liability or responsibility whatsoever regarding your pension compliance.

Nannywage Ltd pensions even without a pension service subscription should the time come when you wish to close your HMRC PAYE scheme, as you have no employees and do not plan on employing further, inform on your behalf The Pension Regulator that you are no longer an employer for the purpose of Automatic Enrolment pension, closing your pension compliance file.

As an Employer you are free to choose the pension provider you wish to use.

Nannywage Ltd Pensions are unable by law to advise you which provider to use, as you must by law choose which pension provider you wish to use.

However, whichever pension provider you choose to use, it should be remembered that the minimum contribution percentages are the same for all Automatic Enrolment schemes*.

The Pension Regulator states that an employer has the right to choose their own pension provider. In reality some large pension providers have stated they do not wish to provide Automatic Enrolment pensions for small employers as they deem it not financially viable, some have completely withdrawn their small employer facility and of the remaining providers, some are charging up to £500 as a one off set-up fee.

*Please note: If you or your employee, wish to contribute a higher percentage of salary than the Current minimum percentage contributions. YOU MUST E-MAIL Nannywage Ltd Pensions with your EXACT PERCENTAGE CONTRIBUTION instructions for Employer percentage contribution and Employee percentage contribution.

If you choose to use NEST (National Employment Savings Trust), the pension service provided by the government, Nannywage Ltd Pensions will fully manage your pension set up and continuing compliance each month or week, inclusive of all regulatory letters to your nanny, subject to you using Nannywage Ltd payroll service.

If you choose a pension provider other than NEST, you will still need to subscribe to Nannywage Ltd pensions service in order for us to process your pension scheme in payroll and show pension contributions on your wageslip, but you will administer the scheme.

Pay your employee the NET shown on each wageslip

The Employee pension contribution you are DEDUCTING from their salary. You pay the NET Figure shown on the wageslip as the NET shows the salary figure AFTER the employee pension contribution has been deducted.

You need take NO ACTION over making pension contributions to NEST

Each pay day Nannywage Ltd Pensions will inform NEST of the TOTAL pension contribution, this is your employer contribution and the employee contribution you have already deducted from their net salary.

Nannywage Ltd pensions do this by CSV file format and you agree that Nannywage Ltd will fully administer the contribution reporting to NEST.

You are each month sending the employee contribution to NEST with your contribution via bank transfer. Your bank statement will show a TOTAL contribution taken for employee and employer. NEST will take the total contribution from your bank account by Direct Debit.

Contribution totals are shown on each wageslip as Ee (employee) & Er (employer). On the far right of each wageslip are the cumulative pension totals to date (per tax year).

At the start of employment. Nannywage Ltd sends you 2 letters:

  1. The first is the compliance letter addressed to your worker for you to give to your employee, fully explaining why they are being enrolled into your pension scheme and the facts and figures of NEST
  2. The second is a letter addressed to you to set up the pension scheme which you need to complete and return to Nannywage Ltd

FAQ’s

A qualifying worker: This is a person between 22 years of age and state retirement, with earnings in excess of the current earnings allowance. These workers are automatically enrolled into your pension scheme

Non qualifying worker: The employer must still have a pension scheme in place, should the employee choose to opt-in to the scheme.

Pension compliance: As an employer, you must enrol employees into a pension scheme and the Pension Regulator has the power to impose non-compliance fines. The Employer cannot tell their employee not to join and if the employer does, again, the Pension Regulator has the power to impose fines.

Status of employee: If the employee is under the threshold for salary or outside the age limits you will still need to comply to The Pension Regulator Declaration of Compliance, even if you do not set up a pension scheme.

If the employee does NOT want a pension: The employee can opt out. The employer must still set up a pension scheme and enrol the qualifying employee. The employee then must contact the pension provider to arrange opt out. If the opt out is completed in the first month, the employee and employer will receive a full refund. If the employee opts out after the first month then they do not need to make further contributions, but the contributions made will remain in their NEST pension. The employer must maintain the pension scheme, should at any time the employee change their mind and decide to opt back in.

What Nannywage Ltd Pension service does for you:

Subject to you deciding to use NEST and subscribing to Nannywage Ltd Pension & payroll services:

  1. We set up a pension scheme.
  2. We send to you all regulatory letters.
  3. Set up your Direct Debit Mandate.
  4. Assess your workers.
  5. Enrol your employee/s in your pension scheme.
  6. Complete your declaration of compliance with The Pensions Regulator.
  7. Assist with employee opt outs and opt-ins.
  8. Automatically inform NEST of your contributions so they automatically take contributions from your designated bank account.
  9. Comply to The Pension Regulator rules and store your enrolment records.

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