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Employers – are you ready for the next stage of Auto Enrolment?

Jon Heddle

08 February 2018

You may have heard the recent announcement from The Pensions Regulator, which outlined changes to Pension Scheme contributions, both for employers and employees. If your organisation has staff on the payroll, then you will need to act now to ensure you remain compliant.

Auto refresh

It was the new buzzword of the employment world, but Auto Enrolment was introduced as part of the Conservative manifesto in 2010 and came into force from October 2012. It ensured that every employee was offered a workplace pension by 2018.

Every employer was given a staging date. This required them to enrol all staff into a pension scheme by this date and ensure they were paying the minimum amount into that scheme.

What’s new?

The Pensions Regulator has now announced that the minimum amount employers are required to pay into an Auto Enrolment pension scheme will increase. This will be phased in over two stages – the first increase must be in place from 6 April 2018 and the second from 6 April 2019.

Increases will vary according to what employers and staff pay into a pension scheme, as it is typically based on earnings. For the 2017/2018 tax year this earnings range is between £5,876 and £45,000 a year and for 2018-2019 is expected to be between £6,032 and £46,350 a year.

Most employers currently use a pension scheme which requires a total contribution of the 2% minimum, which is the law. But, if you are unsure what this is, then it will be included in the documents that were sent to you when the scheme was set up.

No exceptions

Phasing applies to all employers with staff enrolled in an Auto Enrolment pension scheme. If you don’t have any staff enrolled in a scheme, for example self-employed contractors, or you already pay above the increased minimum amounts, then you don’t need to take any further action.

You can download our latest payroll update for more information, including considerations when calculating contributions, such as commission, bonuses or overtime. Alternatively you can contact the payroll team at Wilkins Kennedy to discuss how to take matters forward.

About Jon Heddle

Jon Heddle

Jon joined Wilkins Kennedy back in 1979. He is the payroll manager for our Southend on Sea branch and is a Fellow member of the Association of Accounting Technicians.

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