Important Changes to Auto-enrolment

Under Auto Enrolment the minimum contributions in place will be changing with effect from the 6th April 2018.  By law, the minimum contributions will be increasing in two phases; on the 06/04/2018 and once again a year later on the 06/04/2019.  If you are an employer operating an auto-enrolment workplace pension scheme you will be required to increase the contribution levels for your employees accordingly to meet these minimums.

Although there are no additional duties on you as the employer to inform your employees of these increases, you may wish to do so.  This should help to minimise any queries or questions your workforce may have.

The tables below show what the base contributions are for each earnings definition, and the dates they will increase. You can also choose to give more than the minimum amount should you wish.

 

 

Banded (qualifying) earnings

 

Date effectiveEmployer minimum contributionEmployee minimum contributionTotal minimum contribution
Currently until 5 April 20181%1%2%
6 April 2018 to 5 April 20192%3%5%
6 April 2019 onwards3%5%8%

 

 

Total pay

 

Date effectiveEmployer minimum contributionEmployee minimum contributionTotal minimum contribution
Currently until 5 April 20181%1%2%
6 April 2018 to 5 April 20192%3%5%
6 April 2019 onwards3%4%7%

 

Basic pay

 

Date effectiveEmployer minimum contributionEmployee minimum contributionTotal minimum contribution
Currently until 5 April 20182%1%3%
6 April 2018 to 5 April 20193%3%6%
6 April 2019 onwards4%5%9%

 

If as a business your present contribution levels to auto-enrolment are above the new minimum percentages there is no legal obligation for you to increase these further, unless you wish to do so.

If you should have any questions or would like clarification of any of the detail noted within this article then please feel free to contact a member of either the Financial Planning Department in our Taunton office or your pension provider who can assist further with this.

National Minimum Wage Increase

The National Minimum Wage (NMW) is the minimum pay per hour that most workers under the age of 25 are entitled to by law; these rates are due to increase from the 01/04/2018, the new rates are as follows:

 

 Age 25 and over21 to 24 years old18 to 20 years oldUnder 18 years oldApprentice
From April 2018£7.83£7.38£5.90£4.20£3.70

Please be aware there are some workers who are not entitled to these rates, for further guidance and clarification on these then please refer to https://www.gov.uk/national-minimum-wage/who-gets-the-minimum-wage

 

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