Auto-enrolment contributions to increase again in April 2019
It doesn’t seem like five minutes since the minimum contributions for auto-enrolment pension schemes increased. We are now facing a further increase which will take effect from 6 April 2019.
| Date Effective
|
Employer | Employee | Total |
| Old Rate, up until 5 April 2018 | 1% | 1% | 2% |
| Currently, from 6 April 2018 to 5 April 2019 | 2% | 3% | 5% |
| From 6 April 2019 onwards | 3% | 5% | 8% |
Currently, automatic enrolment requirements mean employers must contribute a minimum of 2% of an eligible worker’s pre-tax salary to their pension pot, with the individual contributing 3% themselves.
However, under the new requirements, employers and employees will now have to contribute a minimum of 3% and 5%respectively.
It is essential that employers consult with their team before making any changes to their pension scheme and we recommend that you write to your staff to let them know about the increase in contributions. It is also important for you to liaise with your payroll department or bureau to make sure they are ready to calculate and deduct the increased contributions too!
Increase to NMW rates too
Both the National Living Wage (NLW) and National Minimum Wage (NMW) rates will also increase from 6 April 2019 as follows:
| From 1 Apr 18 | From 1 Apr 19
|
|
| Workers aged 25 and over (NLW) | £7.83 an hour | £8.21 an hour |
| Workers aged 21–24 | £7.38 | £7.70
|
| Workers aged 18–20 | £5.90 | £6.15 |
| Young workers rate for workers aged 16–17 | £4.20 | £4.35 |
| Apprentices under 19, or over 19 and in the first year of the apprenticeship
|
£3.70 | £3.90 |
Just a reminder ….
We reported on this last year, but changes to the way employers issue payslips and the information that they have to include on the payslip will also come into force from 6th April 2019. From this date, the legal right to a payslip will be extended to include those who are recognised as workers.
Employers will also be obliged to include the total number of hours worked on payslips for employees whose wages vary depending on how much time they have worked, and it is important that employers work with their payroll department or bureau to ensure the correct processes are in place ahead of this deadline.
Implications
All employers need to be fully aware of their obligations regarding auto-enrolment, NLW, NMW and ensure appropriate payroll processes are in place ahead of these April 2019 deadlines!
Minden U.K. Limited use Aspire Business Partnership LLP. This firm provide Minden U.K. Ltd with practical and commercially sound advice in relation to all aspects of compliance, business strategy and conflict resolution. Original article can be found on Aspire’s website:
https://www.aspirepartnership.co.uk/News/3243/money-money-money