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Pensions Auto Enrolment – Contribution Rate Increases from April 2018

7th March 2018

Pensions Auto Enrolment – Contribution Rate Increases from April 2018

The roll-out of auto enrolment for pensions, started in 2012, will complete in 2018.  It is estimated that 10 million people will be newly saving or saving more into pensions as a result. 

The auto enrolment minimum is initially 2% of which at least 1% must be paid by the employer. In April 2018, this increases to 5% of qualifying earnings of which at least 2% must be paid by the employer, trebling the effective minimum employee contribution.  In April 2019 this rises again to 8% qualifying earnings  of which at least 3% must be paid by the employer, as set out below.

These contributions are due on earnings over £113 per week up to an upper limit of £866 per week.

Date

Employer minimum contribution

Employee minimum contribution

Total minimum contribution

Before April 5 2018

1%

1%

2%

April 6 2018 – April 5 2019

2%

3%

5%

April 6 2019 onwards

3%

5%

8%

If you haven’t already done so, all employers must talk to their pension providers now, to plan for the immediate and future increases.

If you should have any questions relating to auto enrolement then please do not hesitate to contact Katharine Arthur, Partner and Head of Tax or your usual haysmacintyre adviser.

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