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Automatic enrolment: Minimum contribution levels due to increase in April 2018 and April 2019

By law, on 6 April 2018, all employers are required to increase their contributions into their staff's automatic enrolment pension to at least of 2%. Staff contributions will also increase so that their contributions make up the shortfall needed to bring the total minimum contribution up to 5%.

Contribution levels will rise again on 6 April 2019, with the employer paying a minimum of 3% towards the pension, and the total minimum contribution reaching 8% – with staff making up the 5% difference.

The table below shows the minimum contributions employers who set up a defined contribution scheme for automatic enrolment must pay, and the date when they must increase. This is calculated based on earnings between £5,824 to £43,000 per year (£486 to £3,583 per month, or £112 to £827 per week), and including certain elements of pay.


 Date effective

Employer minimum contribution 

Staff contribution 

Total minimum contribution 

 Until 5 April 2018




 6 April 2018 to 5 April 2019




 6 April 2019 onwards





What Employers Need to Do?

You can choose to pay the full amount of the total minimum contribution. This may mean staff do not have to pay in at all, unless the scheme's rules say that they have to make contributions. Both the employer and their staff can choose to contribute more than the minimum amounts to the pension if they want to.

If employers pay in more than their legal minimum contribution, but less than the total minimum contribution shown in the table, then staff will need to pay in at least enough to make up the shortfall between these amounts.

The increase in minimum contributions should be simple to do, but employers need to start thinking about the increases early, and plan ahead for when they come into effect in April 2018 and April 2019.

It’s possible that employers may be been planning to make the increases from October 2017, as this was the original date for the first phase of the increases. However this date was changed by the government to start from 6 April 2018. If  employers would still like to make the increase from this dateOctober 2017, they can. They should speak to their pension and payroll providers to find out how to do this.

·       It’s important that your workplace pension scheme and payroll software are able to support the contribution increases by 6 April 2018, otherwise the schemes used by employers may no longer qualify for automatic enrolment, and the right contributions might not be deducted at the right time.

·       Pension schemes should already be making necessary changes to support the increases, and will communicate this, but it's it is your responsibility as employer to make sure they're you are using a qualifying scheme, and that the right amount of pension contributions are is deducted. If your chosen pension scheme does not support the increases, then your clients will need to talk to them about their options.

·       While there is no legal requirement for you as employer to write to your staff, this is something they you may want to consider doing to help minimise queries, or reduce the number of workers who decide to leave their schemes as a result of the increases. Your pension scheme provider should be able to help with this.

If your client's payroll does not process pro-rated contributions, they should talk to the pension provider and payroll provider, and agree how best to deduct the amount due.

If you need any help or assistance with setting up your Automated Pension Scheme or running a payroll scheme, please contact your local Rothmans branch, and they will be able to assist you with this service. 

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