The minimum contributions paid by employers and employees into automatic enrolment workplace pension schemes are increasing from the 6th April 2019.
Employers must take steps to ensure at least minimum amounts are being paid into the pension scheme and the new rates apply whether the pension scheme has been set up for auto-enrolment or an existing scheme is used.
The table below sets out minimum contributions:
|
Date |
Employer minimum contribution |
Staff contribution |
Total minimum contribution |
|
Current rate: 6 April 2018 to 5 April 2019 |
2% |
3% |
5% |
|
New rate: 6 April 2019 onwards |
3% |
5% |
8% |
By law, a total minimum amount of contributions must be paid into the scheme. Employers must make at least the minimum employer contribution towards this amount and employees must make up the difference.
If you decide to cover the total minimum contribution required, your employees will not need to pay anything. If you are already paying above the increased minimum amounts or you do not have any employees in a pension scheme there is no need to take any further action.
If you’re using a defined benefits pension scheme the increases do not apply.
When you are calculating contributions for this type of scheme you must include all payments:
- salary
- wages
- commission
- bonuses
- overtime
- statutory sick pay
- statutory maternity pay
- ordinary or additional statutory paternity pay
- statutory adoption pay
Check with your pension provider for information about the scheme used and further information from the Pensions Regulator about the increase can be found here.