Pension contribution rates to increase this April

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Contributions for automatic enrolment pensions will increase from April 6 this year (2018).

Under the Pensions Act 2008, every UK employer must provide a pension scheme for their employees and contribute towards it.

It is compulsory for all employers to automatically enrol their employees into a pension scheme, even if they have one employee.

The contributions are required to increase over time, the first increase will be this April which will see total contributions jump from 2% (current rate) to 5% (April 6, 2018 rate).

The minimum contribution (2018/19) by an employer will be 2%, the 3% shortfall is then paid by the employee; increasing to 3% employer contribution and 5% employee contribution in April 2019.

The table below demonstrates the phases of contribution increases*

Date effective

Employer minimum contribution

Staff contribution

Total minimum contribution

Currently until  April 5, 2018




April 6, 2018 to April 5, 2019




April 6, 2019 onwards




“The minimum amount paid into your workplace pension, both by the employer and employee, is going to increase on April 6 this year,” said Zoe Horswill, payroll manager at Ellis & Co.

“The increase will be automatic so does not require any action.

“However, we are reminding clients about re-enrolment, which takes place three years after your auto-enrolment start date, and every three years thereafter.

“Employers will have to re-enrol all staff members who want to contribute to the scheme, employees who opted out will need to opt themselves out of the scheme once again.”

For further information about auto-enrolment or any other payroll matter contact Ellis & Co on 01244 343504.