Automatic Enrollment contributions set to increase

 

By law, on 6 April 2018, employers are required to increase the amount of their minimum contributions into their staff Automatic Enrolment pension to at least of 2% of qualifying earnings. Members of staff will have to pay the shortfall needed to make the total minimum contribution up to 5%, including the employer’s contribution.

The minimum contribution levels will rise again on 6 April 2019, with employers paying a minimum of 3% towards the pension, and the total minimum contribution reaching 8%, with staff making up the difference.

The table below shows the minimum contributions that employers who set up a defined contribution scheme for automatic enrolment must pay and the date when they must increase. This is calculated based on earnings between £5,876 to £45,000 per year (£490 to £3,750 per month, or £113 to £866 per week), and including certain elements of pay.

 

Date effective

Employer minimum contribution

Staff contribution

Total minimum contribution

Currently until 5 April 2018

1%

1%

2%

6 April 2018 to 5 April 2019

2%

3%

5%

6 April 2019 onwards

3%

5%

8%

 

More details can be found at  http://www.thepensionsregulator.gov.uk/phase

If you would like to discuss any aspects of Payroll or Auto Enrolment in more detail please contact our Payroll team on 01460 68700 email  payroll@lentells.co.uk