TLC loves… keeping you up to date about pensions
18th February 2019
If you provide a workplace pension it’s important to keep up to date with your obligations about how much you need to contribute, and things are about to change.
But don’t worry, as always, we’ve got you covered.
What’s the deal?
When automatic enrolment to workplace pensions was introduced, the Government scaled the level of contributions (known as phasing), presumably to ease the impact for businesses.
We’re reaching the end of that phased start, so from 6 April 2019 both employer and employee mandatory contributions to auto-enrolment pensions will increase.
(If you want to refresh your memory on workplace pensions, read more here.)
What’s the damage?
If you currently make the required minimum contribution you will be paying in 2% and employees will be paying 3%.
From 6 April employer contributions will increase to 3% and employees will have to pay 5%.
There is a small benefit for employees though, in the form of an increase to the tax-free allowance from £11,850 to £12,500.
What do you need to do?
If you are currently paying the minimum employer contribution you need to be aware this will increase from 6 April 2019. We’ll make the necessary changes to your payroll (if we process it for you) but you also need to make your staff aware they will have less in their pay packet from that date.
If you are already paying more than the required minimum contribution as at 6 April 2019 you don’t need to do anything different.
We’re always on hand to help out, so if you have any queries about pensions do give Claire a call on 01937 534505.