Are you ready for Auto Enrolment?

Auto-enrolment is a new pension savings scheme for certain employees who are not paying into a pension. The scheme will mean that 800,000 workers will be automatically added into a private pension scheme in addition to their State pension but have the option to opt out after 6 months. Auto-enrolment is expected to be introduced in September 2025, but businesses are now being strongly advised to commence planning for this scheme.

Under the scheme, the employee, employer, and Government all pay a certain amount into the employee’s pension fund. According to a 2023 survey by the Central Statistics Office, 32% of workers aged between 20 and 69 are not signed up to a private pension. Without a change, hundreds of thousands of workers would be reliant solely on their State pension when they retire.

The scheme sees employees contribute 1.5% of their gross salary during their first three years of paying in. This will rise to 3% from the third year on, 4.5% from year six on, topping out at 6% from the tenth year onwards. The aim of auto-enrolment is to boost the numbers of people with a pension and the level of their retirement savings.

Two in every five adults in Ireland who do not have a pension are unaware of plans for an auto-enrolment scheme. 86% of existing pension holders have some awareness of the proposals, but just 58% say that while they have heard of it, they do not know much about it. 42% of those without a pension also said they have never heard of auto-enrolment. While of those who have some knowledge of it, 44% say they do not know very much about it.

To find out more how auto-enrolment applies to you, talk to us to find out more on 071 9194194 or email financial@obg.ie.