Pension contributions set to rise

The amount going into pensions will soon be going up.

From 6th April 2019, the total minimum amount being paid into the workplace pension both by the employer and the employee will increase from 5% to 8 % of qualifying earnings due to a change in workplace pension regulations. This is based on a qualifying earnings scheme.  This is a nationwide change, involving millions of people and their employers.

Changes to pension contributions look like this…..
 
Date
 
The minimum your employer must contribute
 
 
The minimum you can contribute
 
Giving you a total minimum contribution of
 
 
6th April 2018 to 5th April 2019
 
 
2% of qualifying earnings
 
3% of qualifying earnings
 
5% of qualifying earnings
 
 
5th April 2019 – ongoing
 
 
3% of qualifying earnings
 
5% of qualifying earnings
 
8% of qualifying earnings
 
 
The maximum basic State Pension is just £164.35 per week and is dependent on each individual’s National Insurance record. For most people, this won’t be enough for a comfortable retirement, which is why having personal pension savings is so important.  Employees can also make voluntary contributions any time to increase their personal pension savings.

If you’re an employer, you will need to let your employees know about the changes.  We’ve created a useful handout you can use to communicate with your staff.   
Download handout

If you need advice on this, or any other aspect of payroll administration, please contact your local Moore Stephens adviser
 

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