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As we get older we look back at our youth with fondness, however spare a thought for Generation Z, those born after 1996, they have a lot on their plate.

Saving is difficult at the best of times and nowadays practically impossible for the millennials. For Generation Z, it’s just going to get worse! Let’s look at why…

There are more graduates than ever before and competition for graduate positions is tough. The Financial Times reported that between 2012 and 2016, there was a 40% increase in the number of applications for graduate positions. In the financial industry especially, competition is so fierce that JPMorgan hired only 2% of all graduates who applied!

Once you have fought off the competition and got yourself that dream job, or at least a job, there is the small matter of rent A quarter all graduates in the UK will end up in London within 6 months of completing their degree, where the average price to rent is £1508 per month.  And this figure is not going to get smaller anytime soon, as Savills stated rent prices are expected to increase by 19% over the next five years.

With the average starting salary for a graduate ranging from £19,000-£22,000, saving for a deposit and becoming a home-owner before the age of 35 is near impossible. On top of that, there are student loans and tuition fees to pay back to push this prospect even further away.

This has resulted in a 25% increase since 1996 of those aged 20-34 living at home with their parents, in order to try to save money.

With rising rent prices and fierce competition to secure a graduate position at least auto enrolment ensures that their retirement is taken care of!

So for the rest of us let’s try and help them as much as we can. Mums, dust off their old bedroom, teachers make sure you give them all the tools they need to face the world and employers don’t be greedy. They are the future after all…

Ok, so “defying authority” has many definitions and we are of course not suggesting that people are dusting down their chemistry sets. But did you know, according to Aviva, 1 in 7 firms are breaking the AE rules?

I bet that’s higher that most of you would thought was going on, and the only ones who are paying the price are the businesses themselves.

We all know business are failing to automatically enroll their staff in a workplace pension scheme ahead of their staging deadline and as these staging dates are missed, more are more firms are starting to play catch up.

In fact, 40% of those who have already enrolled did so at the “last minute”. Such a lack of preparation is stressful and to be honest totally unnecessary.

No one is quite sure why companies are leaving it so late, there has been plenty of PR (remember Workie?) and most people are aware of the implications, which could be pretty serious, but maybe psychologically it’s just “another piece of red tape”.

AE solutions, just like our own fully managed AE Service, OneStop, could take care of all AE requirements and save firms the worry as their staging dates loom or indeed pass them by.

It’s like the old Chinese proverb of the man who put-off writing his will for years. One day, after an eye opening conversation with a friend, he felt he should finally do something about it. On the way to the lawyers, whilst texting, he was hit at speed by a pigeon who had lost its bearings.

Sure, it’s not very cheery, but come on, what’s stopping you? Just get on with it.

An estimated 800,000 small businesses are set to reach their auto enrolment staging date in 2017. That’s more than double last year which sat at approximately 336,000. SME’s will now have the added burden to ensure they meet their AE obligations.

Many small business owners are under enough pressure as it is to make sure they are keeping their heads above water without the added admin requirements that auto enrolment brings with it. However, if they fail to meet their AE obligations they will face large penalties and in extreme cases could land themselves in jail. In a recent survey by market researcher YouGov for workplace pensions provider Smart Pension, more than half of small and micro businesses felt auto enrolment would be a burden.

Will Wynne, co-founder and managing director of Smart Pension, stated 2017 is going to be a challenging year for hard-working small companies and that 2017 would be a massive step change. He highlighted that almost a million small firms offer employees an opportunity to save for their retirement for the first time. Which means just over 1.46 million small firms in total will need to set up pension schemes.

Mike Cherry, chairman of the Federation of Small Businesses, said “Our country’s prosperity in 2017 will be founded on the success of the smaller business movement.” He went on to say “any small business owner will tell you that the sheer cost of doing business has steadily risen over the last year, with a range of policy choices hardening at the same time, creating a cumulative effect.”

2017 is going to be a busy year for us all involved with AE, none more so than the SME, so give them a round of applause as they start their AE journey.

“Break a leg!”

In our recent blog post, which you can read here, we briefly touched upon young people’s attitudes towards pensions, and how little attention is paid towards their funds so early on in their professional lives. With the introduction of auto-enrolment, this has forced those in their twenties into contributing towards their pension funds with an initial minimum contribution of 1% of their salary, which will be matched by the employer’s contribution of 1%.

However, a minimum is just that – minimum. According to Prudential, less than half of those under 30 are paying more than the minimum contribution towards their pension fund. And this is a big worry. Today’s young people should pay no attention towards a minimum contribution, rather the maximum they can realistically afford to be putting aside.

There’s no denying it, those in their 20’s and 30’s are hard done by. Student debts, rising rent prices and the impossibility of saving for a mortgage similar to their parents and grandparents are not made easier by rising state pension age. Considering those of us in our twenties face the prospect of not being able to collect the state pension until we are 70, upping contributions beyond the minimum now will cushion the blow without getting into a panic in later years when it is too late. However, this needn’t be a daunting task. Gradually upping AE contributions above the minimum can be done by simple adjustments to lifestyle habits. Coffee stops before work, for example, they add up! By simply foregoing a daily Starbucks fix every working day could see you save almost £30,000 in the span of 30 years.

So young people, think of AE as a blessing, not a curse. Getting into the habit of going beyond the minimum AE contribution now will lead you towards a prosperous retirement as a golden-ager!

The UK is one of many countries, including China, Japan and the USA, to be facing an ageing population. Whilst this is great news for the UK’s current retirees who are able to benefit from a healthy government pension it does pose one key concern. With an ageing – and also increasing – population, a strain is inevitably being put on the government’s pension funds. Taking this into consideration, there have already been talks to raise the automatic enrolment (AE) contribution to 12.5% by 2028.

Some argue that such an increase in contributions is not necessary. For example, an increase in employer contribution results in an increase in employee contribution which may be an unwanted hit to their monthly pay. This feeling is common amongst young people who do not see the value in thinking about their retirement fund so early on. However, if young people want to continue buying goods and using services at the rate they are used to, now is the time to be upping contributions.

Additionally, there needs to be measures in place to sustain the future of the population. According to the Office for National Statistics (ONS), those aged 90 and over in the UK has tripled since the 1980’s, whilst the population is predicted to increase to over 70 million by 2027. This comes down to key factors such as healthier lifestyles and modern medicine resulting in people living longer. Therefore, increasing the minimum AE contributions will ensure pension funds do not run dry in years to come.

So employers and employees alike, prepare yourselves! Whilst AE laws state by 2018, employers and employees must submit a minimum contribution of 1% each, this is only just the beginning. In order to sustain our growing and aging population, contributions are going to have to rise in order to prevent a pension pandemonium.

The ‘gig-economy’ is a term cropping up more and more, and refers to the environment where workers can operate under a contractor basis for an organisation. For example; Deliveroo, Uber, Etsy and Airbnb. With gig economies, the appeal is there. A short term solution for many to earn an income in an uncertain job market is proving to be a sure way to earn some money with flexible working hours. However, a potentially short term solution still has long-term rights which affect their future.

Uber’s recent tribunal in particular has shaken the world of Auto Enrolment (AE). Once upon a time, employers in a ‘gig-economy’ could hide behind the shield of adopting self-employment practices. However, it was announced on the 28th October 2016 that Uber employees are classified as ‘workers’ and not ‘self-employed’ which Uber are now trying to appeal. Failing the appeal, this will open up a new can of worms surrounding AE and 60,000 ‘gig-economy’ workers in the UK will have more recognised employee rights, such as being enrolled in a pension scheme.

Similarly, Deliveroo have been encouraged to unionise in an effort for the company to recognise them as workers and as such have certain rights. This encouragement comes after the new payment structure was announced as £3.75 per delivery compared to the old structure of £7 per hour and £1 per delivery. This new structure leaves some employees unable to earn any money during their shift if no deliveries have been booked. Therefore, it is so important for a union to be in place in order to treat the Deliveroo riders’ as workers with access to basic rights such as a pension scheme, as opposed to being viewed as just another cog in the machine.

The next few weeks will witness the government examine the terms of AE to ensure nobody misses out and that those classified as workers will be entitled to the rights set out in The Employment Rights Act 1996. Watch this space for future developments!

An increasing hot topic in the realm of AE includes the rising level of penalties being issued by The Pension Regulator (TPR) which many companies are still struggling to adhere to. Simply put, employees who meet a certain criteria must be enrolled in a pension scheme by their staging date. No head in the sand, no turning a blind eye – NO EXCUSES. This post will reinstate why it is so important to ensure your employees and clients are enrolled in a pension scheme as soon as possible.

This year alone, Q3 witnessed 3728 Fixed Penalty Notices due to the failure to comply with AE guidelines. A failure to act can result in an initial £400 fine as well as an accrued daily rate ranging from £50-£10,000. Swindon Football Club know just too well how quickly fines set by TPR can add up due to failure to act on penalty notices. By the 16^th of February 2016, the football club had finally settled a hefty £22,900 fine by TPR for repeatedly failing to comply with the guidelines. This included the initial £400 fine for failing to act by their initial staging date of 17^th October 2014, as well as the first lot of fines set at £2500 per day from 18^th February 2016 – 26^th February 2015.

While TPR repeatedly stress they are there to help employers, they will not tolerate any excuses. Part of the problem rests with the fact that many employers, and those of SME’s in particular, are still not aware of how simple the process can be through outsourcing their needs to the right people. Don’t get caught out by avoidable fines! If an employer is strapped for time, or confused by the AE process, pension experts such as pensionsync and OptEnrol are on hand to help guide employers along the process.