Auto Enrolment Increase Delay

Auto Enrolment Increase Delay

The government’s auto enrolment pension reforms have been up and running since 2012. At the start the new pension duties only applied to the largest employers, but now it’s time for smaller businesses to get ready.

If you own a business that employs one or more workers you’ll have to:

  • set up a workplace pension scheme that meets the new rules
  • automatically enrol workers who meet the age and earnings criteria
  • make a minimum contribution for all eligible workers
  • enrol other workers if they ask to join the scheme

The Chancellor announced in the Autumn Statement (Nov 2015) that the dates for the increases in Auto Enrolment contributions will be delayed.

What was announced?

The originally published dates for these are shown below;

 

Employers staging date:

Employer

Minimum Contribution

Total

Minimum Contribution

To 30Sep17

1%

2%

01Oct2017 to 30Sep 2018

2%

5%

01Oct 2018 onwards

3%

8%

What’s changed?   It was decided that the increases should align with the tax years, so the published dates above will move to the April of the following years. What does it mean?

 

The increase to 2% and 3% employer contributions will now be delayed until 6 April 2018 and 6 April 2019 respectively. Whilst this will ultimately give people less in their overall pension pot, this should make the increases easier to administer and be aware off.

 

 

 

 

Source : Prudential – Autumn Statement Nov15