Pensions Auto-Enrolment – A Guide for Supply Teachers

What is pensions auto enrolment?

Whilst most people will be entitled to some form of state pension once they hit retirement, the joint pressures of an ageing population and a decrease in the number of people investing in private pensions has been identified as a huge potential problem for the future. A number of commentators have described a “pensions time-bomb” and financial experts have expressed concern that the pensioners of the future simply won’t have enough to live on during their later years.

This prompted a change in legislation which was introduced in 2012 and has been implemented for all employers in the UK. The goal is to ensure that all workers in the UK have the opportunity to access a workplace pension, and as such it applies to all workers over the age of 22 who earn more than £10,000 per year.

The government has created a calculator which helps both employers and employees to calculate when they will need to be enrolled by. The process started with the country’s largest employers in 2012, and will continue until 2018.

The employer must pay a minimum pension contribution of 1 per cent of the employee’s qualifying earnings, but this will rise to 3 per cent by 2018. The employee has to pay in 0.8 per cent, rising to 4 per cent by 2018 and the government pays 0.2 per cent, rising to 1 per cent by 2018.

Eligibility


Anyone aged under 75 and resident in the UK should be eligible to contribute tax efficiently to a pension. Most UK residents will also qualify for a state pension but this will only pay you £110.15 per week so contractors will usually supplement this state provision with a personal or company-funded pension to improve their future retirement income and save tax today.

 

How does this work for supply teachers?

If you’re employed either directly by the school you’re working in, or by the local authority then you qualify for the Teachers’ Pension Scheme, even if you’re a supply teacher and even if you’re paid by the hour.

If you’re employed directly, the Teacher’s Pension Scheme forms a part of your remuneration package, so it’s important to understand what being part of the scheme means for your finances.

When you start work you will be automatically enrolled in the Teachers’ Pension Scheme and start paying into their pension from your very first pay cheque, as will your employer. You will be able to access detailed information about how the scheme works, including records of your contributions and information about your pensionable age through your online account.

 

What if you’re working through agencies?

Supply agencies are not permitted to participate in the Teacher’s Pension Scheme, so if you work through an agency you won’t be able to use it. The law still applies, however, meaning that all employers, including agencies, are required to offer workplace pensions.  

If you have more than one employer and the criteria are met, each employer will have to enrol you so if you work for several different agencies you could end up with several different pension pots, which might not be the most efficient way to save.

 

What if you work for an umbrella company?

An umbrella company like Orange Genie Education can employ you for all your assignments, even if they’re arranged through more than one agency. Because the umbrella company is your employer the same rules apply and they must provide access to a workplace pension. However because you only have one employer you’ll only be enrolled onto one pension. This is one of several reasons why many supply teachers choose to work through umbrella companies as it ensures that their finances are kept as simple as possible.

What if you want to make your own arrangements?
 

If you want to make your own pension arrangements can do so by opting out of the auto-enrolment pension. However, you cannot opt out until the enrolment process has been completed as your employer is required to enrol all qualifying employees.
 

Overseas trained teachers

Even if you trained abroad and are only planning to stay in the UK for a short time, your employer will still have to enrol you onto a pension scheme if you meet the qualifying criteria. Once you’re enrolled it’s up to you to decide if you want to stay on the scheme. We suggest you examine the scheme in detail so you can decide if it fits with your plans for the future. For example, you might want to check if you can transfer the money you’ve saved when you leave the UK.

 

If you have any questions or to find out more about how Orange Genie Education can help you please call us on 01296 468483 or email education@orangegenie.com

 

Why Orange Genie Education?

We employ and pay thousands of supply teachers and education support staff every year. Our employment portfolio stretches over 10 years in the umbrella industry making Orange Genie Education one of the most trusted umbrella brands. With this in mind, there’s no wonder we have long lasting relationships with hundreds of recruitment agencies all over the UK. Upon joining Orange Genie Education you become an employee of ours benefiting from:

Single employer for all assignments

  • One payment for all different agency assignments completed in a week
  • Simplified and efficient taxation from single tax code
  • Guaranteed pay for the work completed
  • Continuous employment rights
  • Maternity and Paternity pay
  • Sick pay
  • Access to a workplace pension
  • Statutory rights
  • Improved personal credit references and rating
  • Save over £700 with Orange Genie Rewards

Reassurance our supply teachers are employed by an FCSA member that protects and supports contractors. Our aspiration is to improve the lives and wellbeing of supply teachers and education support staff.

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