From 6th April 2019, overall minimum pension contributions into qualifying pension schemes are to increase. For some employees the increase will be significant and provisions should be made before the start of the tax year.
The current rates and contributions for the 2018/19 and 2019/20 are as follows:
Date effective Employer min. cont’n Staff cont’n Total min. cont’n
6/4/18 – 5/4/19 2% 3% 5%
6/4/19 onwards 3% 5% 8%
Note that the employer must contribute a minimum amount and that an overall minimum level of contribution needs to be met. There is no requirements for the employee to pay anything, providing the total minimum contribution has been met by the employer. We are urging employees to plan for these changes and advising employers to use the new rates as appropriate.
It is possible for both employers and employees to pay in more than the minimum contributions up to the annual allowance of £40,000.
For pension schemes which aren’t ‘qualifying’ for auto enrolment purposes, different rules apply. We can advise you on these and ensure that as an employer, you are meeting your requirements under auto enrolment.
More information can be found on the government’s HMRC site.