Pension Contribution increase ahead
In April 2019, along with the minimum wage increases, there will be an increase in the contribution percentage for both employees and employers.
Since October 2012 9.5 million workers have enrolled work place pensions. Individuals saved an extra £6.9bn into workplace pensions in 2017-18 as a result of auto-enrolment and opt-out rates are still believed to be below 10%.
The rates can be found below.
|Date effective||Employer minimum contribution||Employee minimum contribution||Total minimum contribution|
|Until April 2018||1%||1%||2%|
|Between 6th April 2018 to 5th April 2019||2%||3%||5%|
|6th April 2019 onwards||3%||5%||8%|
The calculation for this type of scheme is based on a specific range of earnings. Most employers use pension schemes that will require a total minimum of 8% contribution to be paid from April 2019.
For the 2019/20 tax year this range is between £6,136 and £50,000 a year. These figures are reviewed each year by the government.
WHAT DO YOU NEED TO DO?
You will need to work out which members of staff this increase applies to and then let them know about the increase. Click here to download a template letter to send to the relevant members of staff.
You will also need to ensure your payroll function manages the increases correctly.
If you want to check contributions visit the Pension Regulator calculator. It will tell you contributions for both employee and employer, annually or monthly.
If you are new to employing people or need to set up a workplace pension for your staff the please give us a call. We can help with workplace pensions, payroll and bookkeeping. Give us a call now on 01379 640555.
Our office is located on the Diss Business Park. Drop in and see us or give us a call on 01379 640555.