|From 6 April this year, the minimum contributions will rise to 5%, with 2% from the employer.|
Since 2012 employer and employee automatic enrolment contributions have totalled 2% of ‘band earnings’, with the employer having to pay at least 1%. From 6 April this year, the minimum contributions will rise to 5%, with 2% from the employer. The table below shows the extra savings, based on an employee earning £26,000 a year.
|2017/18 contribution £ pm||2018/19 contribution £ pm||Change %|
* Paid net and assuming basic rate tax relief at source
Further increases happen in April 2019, as the total rises to 8% with 3% from the employer. Each April there are generally also tax and NIC changes, so the impact on employees will be cushioned marginally.
The Financial Conduct Authority does not regulate tax advice. Levels and bases of taxation and tax reliefs are subject to change and their value depends on individual circumstances. Tax laws can change. Occupational pension schemes are regulated by The Pensions Regulator.
The information in this article does not constitute advice and should be used for informational purposes only. This content has been provided to Helm Godfrey by Taxbriefs.