Uplift in minimum employer contributions for auto-enrolment pension schemes

For those employers auto-enrolling employees into a basic level pension scheme, today sees a rise in the minimum contribution rates you have to make.

Key points:

• the total minimum contribution increased from 2% to 5% of qualifying earnings on 6 April 2018, and rises again on 6 April 2019 to a total minimum amount of 8%. If you have chosen to use certification, your total minimum contribution rates will also increase on these dates
• you and your staff can choose to pay more than the minimum contributions if you/they wish
• you can decide to pay the total minimum contribution, which may mean your staff don’t have to make up any shortfall, and may not have to pay into the pension at all, depending on the scheme’s rules
• to remain a qualifying scheme, all automatic enrolment pension schemes with contribution rates that would be below the minimum amount after the rate increases must apply the higher rates
• if you operate a defined benefit (DB) scheme, these contribution increases don’t apply and you don’t need to take any action.

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