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Minimum Wage Salary Sacrifice - Not Offered Alternative

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scooby359
scooby359 Posts: 110 Forumite
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in Auto-enrolment
I'm currently on a 12 month contract with a company, started in June this year. I'm mid-30s, on minimum wage, so as I understand it, I should be automatically enrolled onto a pension scheme at work.



I was offered a scheme, but it was a salary sacrifice one, which being on minimum wage, would've taken me below the minimum so I wasn't able to do it.



The company hasn't offered anything else, so I have no pension scheme with them.



Is this allowed, or do they have to provide an alternative in this case? i.e. Wage increase to cover payments, or alternative pension scheme.

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  • greatkingrat
    greatkingrat Posts: 325 Forumite
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    Employers can't force anyone to join a salary sacrifice scheme (whether they are earning more than the minimum wage or not). Therefore to comply with their autoenrolment obligations there must be an option to join the scheme and pay contributions in the normal manner (non salary-sacrifice).
  • Paul_Herring
    Paul_Herring Posts: 7,481 Forumite
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    There's also the concept of 'relevant earnings', where you don't have to be enrolled until you're earning £10,000/y, and once there, it's only a percentage of what you earn over ~£6K that 'must be contributed.'

    I, too, would be interested in what happens in the OP's particular situation where

    - the only scheme apparently available is that of salary sacrifice and
    - the employee is on minimum wage such that the employee's portion cannot be sacrificed from their wages

    (though I'd imagine - at least - that the employer's contribution must still be made at a minimum.)
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • Asghar
    Asghar Posts: 433 Forumite
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    Paul_Herring wrote: »
    There's also the concept of 'relevant earnings', where you don't have to be enrolled until you're earning £10,000/y, and once there, it's only a percentage of what you earn over ~£6K that 'must be contributed.'

    Some employer schemes only base their contributions on your total earnings over £5,876 instead of the whole amount.

    Does that apply for both employee and employer contributions?
  • Paul_Herring
    Paul_Herring Posts: 7,481 Forumite
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    Some employer schemes only base their contributions on your total earnings over £5,876 instead of the whole amount.

    Uh, huh - that's what the bit you quoted from me said...
    Does that apply for both employee and employer contributions?

    As a 'minimum,' yes.

    For those employers who are particularly strict about it, it's also the maximum they'll allow. Something to do with 'too much paperwork' I suspect.

    Anyone who has such an employer, should use another provider for their contributions should they want to save more.

    And should probably look at changing their employer if they can, because if there're scrimping in this area, then I can only imagine what other parts of being in their employ must be like.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
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