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Automatic pension enrolment minimum contributions increase

Published on 10 January 2019

As of 6 April 2019, minimum contributions for automatic enrolment pension schemes will increase for both employers and their employees.

Why does it matter?

Depending on the type pension scheme used by an employer and the rules of that scheme, contribution rates for automatic enrolment pension schemes will increase.  The new minimum contribution rates will be the following percentages of the relevant employee's qualifying earnings:

  • 3% for employers, and
  • 5% for employees

This will bring the total minimum pension contribution to 8%.  If an employer chooses to cover the total minimum contribution, employees will not be required to make any further contribution.

If you are using a defined benefits pension scheme, the increases will not apply.

Under the Pensions Act 2008 it is the employer's responsibility to make sure that the right minimum contributions are paid for all employees. 

What action should you take?

Ensure that the total minimum contribution is paid into the relevant automatic enrolment schemes you use, and make any necessary increases by 6 April 2019.

No further action will be required if you do not have any employees in an automatic enrolment pension scheme or if you are already paying above the increased total minimum contribution of 8%.
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