The current minimum pension contributions for employees inside Auto Enrolment are 2%, with the employer being required to contribute at least 1%.
From 6 April 2018 the minimum contributions will increase to 5%, with the employer required to contribute at least 2%.
This will increase further to 8% from 6 April 2019 onwards, with the employer required to contribute at least 3% towards this.
Obviously this will increase the company’s payroll costs and it is advisable to plan ahead to budget for this.
You will also need to decide on the company’s policy for this increase as some employer’s may want to take more of the burden than the minimum requirement.
The table below summarises the minimum contributions that most employers will make:
|Date||Employer Minimum Contribution||Employee Contribution||Total Minimum Contribution|
|Until 5 April 2018||1%||1%||2%|
|6 April 2018 to 5 April 2019||2%||3%||5%|
|6 April 2019 onwards||3%||5%||8%|
If you have any questions please contact us at any time.