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Auto enrolment pension contribution rates will rise from April 2019.

Currently, the minimum pension contributions to an auto enrolment pension scheme is 5% of qualifying earnings, with at least 2% of that coming from the employer.

From 6th April 2019, the contribution rates will rise to a total minimum of 8%, with at least 3% coming from the employer.

This could mean that employees see a jump in their auto enrolment pension contributions of at least 2%, so we recommend that you give them a heads up in plenty of time before then so that there are no nasty surprise deductions come April.

Staff that had opted in previously may now want to opt out of the scheme – although it is illegal for employers to encourage employees or offer incentives do so.

If they do opt out, and have been in the scheme for over a month, then no further contributions will be made to the scheme on their behalf, but no refund will be made for previously made contributions.  If they opt out within a month of being auto enrolled, then any contributions made up until that point can be refunded back to them.

Most payroll software programs will be already be ready for these changes come April, but it is the employer’s responsibility to get it right.