MINIMUM PENSION CONTRIBUTION - ARE YOU READY!
Minimum pension contributions will soon be increasing –make sure you are ready
Auto enrolment has been a success, with employers like you helping the country to put an additional £2.5 billion into pension savings each year*. This is great news for you and your employees.
Contributions are increasing in phases to help employees ease into the savings habit. We have now reached the first phase, with the increase taking place on April 6th 2018 and the second on April 6th 2019.
Auto enrolment statutory minimum contributions are detailed below. These are based on qualifying earnings.
|Date||Employer minimum contribution||Employee minimum contributions||Total minimum
|Before April 5 2018||1%||1%||2%|
|April 6 2018 – April 5 2019||2%||3%||5%|
|April 6 2019 onwards||3%||5%||8%|
What do I need to do?
1.Ensure the minimum amounts are being paid
If you are paying the minimum amounts at the moment then you will need to increase them by April 6th 2018 and then again on or before April 6th 2019. If you are already paying more than these minimum amounts, or don’t have any staff enrolled in the pension scheme for automatic enrolment, then you don’t need to do anything.
2.Communicate the change to your staff
This is a great opportunity for you to show your employees the benefits of the workplace pension you have provided. It is also important that your employees are prepared for the increase.
To help you, we are developing a range of communication tools, including email templates, posters and videos that you can share with your employees. These will be available on our website by mid-February and we will email you again to let you know when they are ready.
Remember, it’s your legal responsibility to make sure these increases are implemented into your auto enrolment workplace pension scheme. If you don’t do this, it could result in fines from The Pensions Regulator.
For more information visit this section of The Pension Regulator’s website.