Big changes from April 2018 for Auto-Enrolment: Increases in Minimum Contributions

Articles 20.11.2017 Author: Philip Harrison

You may already be aware that the minimum contributions under automatic enrolment will be going up from April 2018.

From 6 April 2018, the increase will take the total minimum contribution from 2% of qualifying earnings to 5% of qualifying earnings (of which the employer must contribute at least 2% of qualifying earnings whilst employees make up the difference of 3%).

There is no legal requirement or additional duties for employers to write to staff about the increases. When a member of staff was first automatically enrolled, the letter they received would have set out that contribution levels will increase over time. It is likely that many employees will be unaware of these changes and the impact it will have on their income.

We recommend that all employers consider reminding employees of these increases to help minimise queries, or reduce the number of workers who decide to leave the scheme as a result of the increases. CBW’s HR Consultancy team believe it is good practice to keep employees informed about any changes to HR practices and processes and we’re always on hand to give clients the help and support you need to communicate these changes.

Please note that you should also consider the need to consult staff if you decide to increase the minimum contribution levels before 6 April 2018.

What next?

We have a team of employee benefit consultants who can advise you on communicating to employees effectively so they are well informed of these changes and understand the benefits of remaining in the company pension scheme. If you would like to find out more about the services we offer please contact the author on the details below.

About the Author

Philip Harrison

Auto-Enrolment Consultant +44 (0)20 7309 3901