The government has made changes to auto enrolment minimum contributions, announcing plans to amend the dates on which the minimum pension contributions will increase. Phase 2, which will see contributions increase to 3% for employees and 2% for employers, was scheduled for 1st October 2017, but will now take place on 6th April 2018. Phase 3, due to start on 1st October 2018, will now see employee contributions increase to 5% and employer contributions to 3% from 6 April 2019.
The government claims that this is not a delay in the roll out of automatic enrolment, but rather a decision to allow employers, especially small businesses, more time to prepare for the contribution increases. This should alleviate some of the administrative burden as the increases will also now be aligned with the start of each tax year, as well as the payroll year, making it easier for payroll software to manage the changes.
For full details of the Auto Enrolment scheme, see our previous article.
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