Automatic enrolment, which was introduced in October 2012 brought with it the biggest changes in UK pensions legislation since pensions began. Estimated to impact on around 9 million people by the time it’s done; it truly is now well under way. While a small number of businesses are still unaffected because of their size, a huge number of UK businesses are already involved in auto enrolment and affected by the new legislation surrounding it.
One aspect of auto enrolment that was, or indeed should have been anticipated by employers is forthcoming contribution increases. Programmed to take place in October 2017 and again in October 2018, the Chancellor announced in the Spending Review and Autumn Statement in 2015 that these contribution dates would be delayed.
The original plan was that contribution levels would increase from 2% to 5% in October 2017 and from 5% to 8% in October 2018. In order to help small business owners’ in particular deal with their administration more simply, it has been decided that these increases should be aligned to the tax years, rather than taking place in the month of October as previously planned. So, in effect, contributions will rise to 5% and 8% in April 2018 and April 2019 respectively. This news is likely to be welcomed by small business owners in particular.
If you are already affected by auto enrolment, it’s important to make sure you are ready for these increased contributions from an administration point of view. This means that you will need to make sure your systems are in place and poised for the rise.
If you need help, there are various places you can turn to. Firstly, your payroll provider should be able to help you. Secondly, The Pensions Regulator website and supporting documentation is not only easy to understand, it’s highly accessible too.
All of that said, if you would like help from ourselves, all you need to do is get in touch. We have teams of experts on hand to make every business’s auto enrolment journey as pain and stress free as possible.