Are you ready for your pension contributions to go up?
Under the Pensions Act 2018, the minimum amounts paid into automatic enrolment pension schemes are increasing for employers and their staff. The increases occur in two phases – the first increase needs to be made by 6 April 2018 and the second needs to be in place for 6 April 2019.
From April 2018
• A contribution must increase from its current minimum of 2% of qualifying earnings (1% from the emplore and 1% from the employee) to 5%, total (2 % from the employer , 3% from the employee)
• It will increase again on 6 April 2019, reaching a total minimum amount of 8%
• The employer and staff member can choose to pay more than the minimum contributions if they wish
• All automatic enrolment pension schemes with contribution rates that would be below the minimum amount, after the rate increases, must apply the higher rates in order to remain a qualifying scheme
Please note that if a pension scheme does not increase its minimum contribution levels in line with the legal requirements, it will no longer be a qualifying scheme for existing members and cannot be used for automatic enrolment.
For further information, please contact your usual Burton Sweet adviser, or contact Geoff Cole, Managing Partner, on 01934 620011 or by email at email@example.com.