Minimum Pension Contribution Increases to come into effect this April
Under the law, the minimum auto-enrolment pension contributions are set to increase this coming April and again in April 2019. Employers will be required to take steps to prepare for the increase in minimum contributions towards their employee’s pension pots.
The total minimum contribution will increase from 2% to 5% where employers must contribute a minimum of 2% and employees must contribute the remaining 3%. Contributions will increase again on the 6th April 2019, from 5% to 8% where employers must contribute 3% and employees making up the difference, contributing 5%.
Employers can choose to pay the full 5% in April 2018 and 8% in April 2019. In these cases, the employee will not need to pay any contributions unless the rules of the pension scheme say otherwise.