Temporary Workers Update: changes to statutory auto enrolment pensions

In April there will be an increase in auto enrolment pension contributions and so we wanted to provide you with all the key facts in advance. We will of course be in touch with all our temporary workers independently. Here are the key elements that should be taken into consideration.

Minimum contribution increases planned by law (phasing)

By law, under automatic enrolment, minimum pension contributions are required to increase over time on set dates.

Beginning on 6 April 2018, employers are required to increase the amount of their contributions into their automatic enrolment pension. Staff members will have to make up whatever shortfall remains of the new total minimum contribution.

The contribution levels continue to rise until the employer is paying a minimum of 3% towards the pension and the total minimum contribution reaches 8% – with the member of staff making up the rest.

If the employer pays the same as the minimum total contribution then the member of staff will not need to pay any contributions, unless the scheme rules require a contribution.

Both the employer and staff member can choose to contribute greater amounts to the pension if they wish.

If the employer contributes more than their required minimum amount – but less than the total minimum amount – then the staff member only needs to make up the shortfall between the total minimum and the employer contribution.

The table below demonstrates the phases of contribution increases, with the employer paying only their minimum, and the staff contribution shown in brackets (the difference between the total minimum and the employer minimum):

Date effective E’er minimum contribution Staff contribution Total min. contribution
Currently until 5 April 2018 1% 1% 2%
6 April 2018 to 5 April 2019 2% 3% 5%
6 April 2019 onwards 3% 5% 8%

If you have any questions about the increase in contributions please contact the team with any questions on 0207 492 1751.

Miriam Caulfield

by Miriam Caulfield on February 19, 2018

posted on boyce recruitment updates, Help for jobseekers, Miscellaneous,