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Minimum contribution levels increased in April 2018.

Are you up to date with the changes in auto enrolment?

May 2018


Originally, the next date for phasing in of the minimum contribution levels was October 2017, but this was pushed back to April 2018.

From April 2018 the minimum AE contribution requirements increased to 2% employer/3% employee, (or combined 5% employer).  

Further increases are due in April 2019, when the combined minimum will reach 8%. 

To remind you, these minimum contributions are based on qualifying earnings i.e earnings between £5,876 and £45,000. You will see clearly that for someone on say minimum living wage and a 40 hour week, the actual contributions are only based on 44% of their total pay. Many old schemes have naturally been set up on a % of basic salary. In these cases, to ensure that contributions will generally exceed the AE minimum, where for example a high % of pay is not basic salary e.g high levels of overtime, shift allowance or bonus, there are alternative minimums. These are described as “sets” and there are three of them, as per the following extracts from the pensions regulator document:
Set 3 - Contributions based on full pay. – Minimum combined contribution = 5%
Set 2 - Contribution based on basic salary – Minimum combined contribution = 5%
(This is where the total of basic salaries of the company is greater than 85% of total gross payroll)
Set 1 - Contributions based on basic salary – Minimum combined contribution = 6%
(This is where the total of basic salaries of the company is less than 85% of total gross payroll)

For further information please contact Helen Smith on 0114 2802859.