When will auto-enrolment contributions increase?
By law, minimum pension contributions will soon be increasing.
The minimum auto enrolment statutory contributions will be increasing in April in line with auto enrolment legislation.
It is the business owners responsibility to make sure these increases are implemented. If they don’t do this, it could result in fines from The Pensions Regulator.
When do the increases take effect?
The first increase must be in place from 6 April 2018 and the second from 6 April 2019. Auto enrolment statutory minimum contributions are detailed below. Note that the percentages apply to the amount of pensionable pay an employee earns, usually between £10,000 and £45,000 p.a.
|Date||Employer - |
|Employee - |
|Total - |
|Before 5th April 2018||1%||1%||2%|
|6th April 2018 - 5th April 2019||2%||3%||5%|
|6th April 2019 onwards||3%||5%||8%|
Who does this apply to?
All employers must take action to make sure at least the minimum amounts are being paid in. However, they don’t need to take any further action if they are already, and will continue to be, paying above the increased minimum amounts at the relevant dates or don’t have any staff enrolled in the pension scheme for automatic enrolment.
I'm a business owner. What action do I need to take?
If you are a One Accounting client, the good news is that we will process the increased pension contributions from 6th April on your behalf. If you run your own payroll, you will need to make the increased contributions yourself, although your payroll software may automatically do this for you.
Where can I find out more?
The Pensions Regulator has a chapter and verse article here.