As part of the workplace pension rules, by law, minimum contribution amounts are required to increase at set times.
From 6 April 2018, the minimum contributions that employers and staff pay into their automatic enrolment pension will have to increase.
The phased increases will see the required rates go up to 2% for employers and 3% for employees (total minimum contribution of 5% of qualifying earnings).
This increase has been planned since automatic enrolment started, and will help employees to save towards an adequate income when they retire.
Are you prepared for the increase?
How will it impact your cashflow and profitability?
Is your payroll software or service ready and compatible to the increases?
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.
|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%|