From 6 April 2018, workplace pension changes come in and all businesses currently paying minimum contributions for Automatic Enrolment will need to increase their contributions. This new legislation change is known as phasing. Contributions will continue to rise over the next few years until the total minimum contribution reaches 8%*.
|Date||Employer minimum contribution||Employee contribution||Total minimum contribution|
|Up to 5 April 2018||1%||1%||2%|
|6 April 2018 –
5 April 2019
|6 April 2019 onwards||3%||5%||8%|
These changes will have significant cost implications for businesses. For example, a business with 50 employees will see costs change from £9,000 to £27,000 per year (Based on business currently applying minimum contributions and average employee salary £1500 per month).
The Pensions Regulator (TPR) has already started sending letters to employers regarding the minimum contribution increase phasing. You can view an example of the letter here.
What we’re doing to help
The majority of our existing clients have now staged and will need to prepare for these changes.
If you have still not complied with your obligations and need some help, please do contact us.