In April 2018, the minimum contributions for the workplace pension will increase. All employers whatever their size, by law, must offer a workplace pension next year. If you don’t have a scheme in place you will need to do this.
Automatic enrolment
Automatic Enrolment means that millions of people now have a pension. What does this mean for you as an employer? As of 1 October 2017, the law on workplace pensions has changed, every employer in the UK must put certain staff into a pension scheme and contribute towards it, this is called automatic enrolment. This applies to all employers who directly employ someone whether this is through a business or someone who works for you in another capacity such as a nanny. You can check whether this applies to you on the duties checker.
Changes to the automatic enrolment contributions
From April 2018 the contributions are increasing in two phases. The first of these increases must be in place from 6 April 2018 and the second from 6 April 2019.
|
Date effective |
Employer minimum contribution |
Staff contribution |
Total minimum contribution |
|
Currently to 5 April 2018 |
1% |
1% |
2% |
|
6 April 2018 to 5 April 2019 |
2% |
3% |
5% |
|
6 April 2019 onwards |
3% |
5% |
8% |
As an employer you must make a minimum contribution towards this amount and your employee must make up the difference. If you decide to cover the total minimum contribution required your employee won’t need to pay anything. You will need to plan the salary costs and how this will be communicated to your employees.
For further information please visit the government websites here and here.
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