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APR

Automatic Enrolment

Posted in: Blog

Automatic Enrolment 

By law, on 6 April 2018, employers must have increased the amount of their minimum contributions into their staff's automatic enrolment pension to at least 2% of qualifying earnings. Staff members will have to make up whatever shortfall remains of the new total minimum contribution up to 5%, including the employer's contribution.


The minimum 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 the member of staff making up the rest.


These eligible criteria mean that almost 900,000 teenagers will be introduced to saving an additional £800m. 


However, many people were quick to criticise the news, including former pensions minister Sir Steve Webb who said that the “proposed pace of change is shockingly lethargic” as reforms taking place by the mid-2020s “risk leaving a whole generation of workers behind.”
 

Date effective

Employer minimum contribution

Staff contribution

Total minimum contribution

Old rates, up until 5 April 2018

1%

1%

2%

Currently, from 6 April 2018 to 5 April 2019

2%

3%

5%

6 April 2019 onwards

3%

5%

8%


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