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Have you budgeted for the forthcoming pension contribution increase?
And do your staff know that they will be paying more from April? Hopefully you are aware that the increase in rates in auto-enrolment schemes will happen very shortly. But a survey from Now: Pensions suggests that 62 per cent of auto-enrolled employees are unaware of the upcoming increases. As a result they will find that their take-home pay is lower than they are used to and if you have not reminded them about the changes that might come as a shock to them.

From April 2018, all employees enrolled in pension schemes must pay in a minimum of 3% of their annual salary, with employers contributing 2%. The current minimum levels are 1% for both employers and employees. In April 2019, these levels will jump again to 8% made up of 5% for employees and 3% for employers.

The government has also recently announced that it will be making further changes to the schemes from sometime in the mid-2020s to increase the number of employees saving through the schemes. This includes proposals to reduce the age that employees will be automatically enrolled to 18 from the current age of 22. There are also plans to ensure that people who are in multiple jobs, but whose combined income totals more than £10,000, are also enrolled by each of their multiple employers.
Posted on 22 Dec 2017

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