Over the course of the next two years Auto Enrolment Pension contribution rates are rising. These changes will affect you as an employer as well as your employees.
Currently the total minimum amount is 2% of qualifying earnings, of which the minimum for the employer to pay is 1%. This means that the employee normally also pays 1%.
From 5 April 2018, these rates will increase. The new total minimum will be 5%, with the minimum employer contribution rising to 2%. From 5 April 2019, they will rise again to 8% and 3% respectively.
Of course, both the employee and the employer can chose to pay more into the scheme should they wish. For instance, if an employer wishes to contribute to his employees’ pension the whole 2% currently prescribed, the employee would not need to add anything, as the minimum amount has been reached.
If you are staging soon, or have perhaps passed your staging date, and would like any help don’t leave it too late! Our dedicated payroll team will be happy to help ease the burden.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.