The minimum contributions that employers
and their staff pay into auto-enrolment workplace pension schemes increases
from 6 April 2019.
|
Date
|
Employer
minimum contribution
|
Staff
contribution
|
Total minimum
contribution
|
|
New rate – 6 April 2019 onwards
|
3%
|
5%
|
8%
|
|
Old rate – 6 April 2018 to 5 April 2019
|
2%
|
3%
|
5%
|
Most employers use pension schemes that
from April 2019 will require a total minimum contribution of 8% contribution to
be paid.
The minimum amount of contributions must be
paid into a scheme. An employer must make at least the employer contribution,
and the employee must make up the difference.
Most employees will see their contributions increase from 3% to 5% following the increase. This may mean that employees see a reduction in their net pay following their increased pension contribution.
About auto-enrolment workplace pension schemes:
Employers must have a workplace pension
scheme in place if any of their employees meets the age and earnings criteria
to be automatically enrolled into the scheme, or for any of their employees
choose to opt-in to the pension scheme who are not automatically enrolled.
An employee must be automatically enrolled
if they have earnings of £192 or more a week (£833 per month/£10,000 per year).
If an employee earns over £192 per week and wants to opt-out of the workplace
pension, the employer must automatically enrol the employee and the employee
has to contact the pension provider directly to opt-out.
Employers must automatically re-enrol all
employees every 3 years who have opted out of the workplace pension in the
past.
