Auto Enrolment - Employers Pension Schemes Increase April 2018
Employees who are member of a company Auto Enrolment Pension Scheme will notice an increase in their contributions from April this year.
There are now more than 9 million people who are members of such schemes and whose staff contribution will rise from a minimum of 1% at present to a minimum of 3% from April 2018. This will further rise to 5% from April 2019 when the full extent of the tiered increase will be felt.
Earnings on which the contributions are based on are between £5,824 to £43,000 per annum.
The scheme was introduced in 2012, with all firms having their staff enrolled by April 2017, to attempt to improve the amount of personal savings and income available for eligible workers once retired. The DWP (Department of Work & Pensions) have recently confirmed that the opt-out rate is less than 10% but general concern has been raised that the opt-out rate may rise as the increases detailed below take effect on staff members take home pay.
|Date Effective||Employer Minimum Contribution||Staff Contribution||Total Minimum Contribution|
|Until 5th April 2018||1%||1%||2%|
|6th April 2018 to 5th April 2019||2%||3%||5%|
|6th April onwards||3%||5%||8%|
This entry was posted on April 4, 2018