Pensions Blog: Changes to pension contributions
Pension contributions are changing – here is what you need to know:
The minimum contributions you and your staff pay into your automatic enrolment workplace pension scheme increased from 6 April 2019.
Working with MATCH Accounting where applicable, it is the employers’ responsibility to make sure these increases are implemented. If we process your payroll, we will ensure that the contribution change is correctly applied and shown on your employees payslip.
Who does this apply to?
All employers with staff in a pension scheme for automatic enrolment must take action to make sure at least the minimum amounts are being paid into their pension scheme.
However, you don’t need to take any further action if you don’t have any staff in a pension scheme for automatic enrolment, or if you are already paying above the increased minimum amounts.
What are the increases?
This table below shows the minimum contributions you must pay and the date when they must increase:
|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%|
By law a total minimum amount of contributions must be paid into the scheme. The employer must make at least the minimum employer contribution towards this amount and your staff member must make up the difference. If you decide to cover the total minimum contribution required, your staff won’t need to pay anything.
Most employers use pension schemes that from April 2019 will require a total minimum of 8% contribution to be paid. The calculation for this type of scheme is based on a specific range of earnings. For the 2018/19 tax year this range is between £6,032 and £46,350 a year (£503 and £3,863 a month, or £116 and £892 a week). These figures are reviewed each year by the government.
Please get in touch with MATCH Accounting if you have any questions regarding the above.