Changes to automatic enrolment contributions
December 18, 2017 | News
The introduction of auto enrolment means that every employer is obliged to automatically enrol workers into a workplace pension scheme if they are aged between 22 and state pension age, earning more than £9,440 a year, and working in the UK.
From next year, the minimum contributions that you and your employees pay into your pension scheme are increasing. The Pensions Regulator is contacting employers about the increase in the minimum contributions that you and your staff must pay into your automatic enrolment pension scheme.
Minimum contributions will increase in two phases. The first increase is from 6 April 2018 and the second from 6 April 2019.
What are the minimum contribution rates?
The minimum contributions you must pay and when they increase:
Employer minimum contribution
Total Minimum Contribution
Up to 5 April 2018
6 April 2018 to 5 April 2019
6 April 2019 onwards
Does this apply to me?
All employers must make sure they pay at least the minimum contributions into the pension scheme. If you're already paying above the increased minimum amounts, you don't need to worry or make any changes.
What do I need to do?
If you have the Pensions Module, Sage will include the new rates in the payroll year end updates for the 2018/2019 and 2019/2020 tax years. The software automatically performs a check to make sure that the contributions are set to the correct amounts. You can then follow a wizard in the pensions module where you can make the necessary adjustments.
The Pensions Module is designed for automatic enrolment and helps you assess your workforce and automatically enrols the required employees to ensure you comply with legislation. If you don’t have the Pensions Module and would like to find out more about it, then give us a call on 0843 4530103.
For more information about changes, visit The Pensions Regulator website.