April’s auto-enrolment increase

February 26th, 2019

From 6th April 2019, the total minimum contribution for auto-enrolment is increasing to 8%. Employers will need to make sure that they contribute at least 3% of qualifying earnings (up from 2%), with employees paying in the remaining 5% (previously 3%). As an employer, it is your legal obligation to ensure that this 8% contribution is met.

Date effective Total minimum contribution Employer minimum contribution Staff contribute the remainder
Current rates 5% 2% Up to 3%
6 April 2019 8% 3% Up to 5%

You can also choose to pay in more than 3%, meaning that your employees won’t need to pay as much into their workplace pension in order to meet the minimum contribution.

To remain compliant, employers will need to be prepared to calculate pension contributions for their staff using the new rates, which will come into effect for any payments made to employees from 6th April 2019. You should check that any payroll software or provider you use is ready to implement the increase.

If Champion look after your payroll, then we will automatically update these rates for you from 6th April. We would also advise employers to communicate these changes to their staff prior to the increase in contributions.

If you already contribute more than the total minimum contribution, or if you use a defined benefit scheme, then you don’t need to worry about the changes and there’s no action needed.

For advice and guidance on the upcoming changes, do not hesitate to get in touch with your client manager.

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