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Employee Benefits Advice for Corporate Clients

Auto Enrolment – being prepared for April 2018 and beyond

We have now entered the last lap of the introduction of auto enrolment across the UK.  With the micro employers now reaching their staging dates, two key dates are fast approaching which will result in employers and employees potentially having to pay more into their qualifying workplace pension scheme.

From 6th April 2018, the minimum contribution amounts for automatic enrolment workplace pension schemes are required to increase. This is known as contribution phasing. Dependent on the definition of earnings and certification basis you have adopted, the new contribution levels are shown below;

  Qualifying Earnings Set 1 – Basic Salary Set 2 – Basic Salary subject to 85% of total earnings Set 3 – total earnings
  Total contribution Minimum Employer contribution Total contribution Minimum Employer contribution Total contribution Minimum Employer contribution Total contribution Minimum Employer contribution
From 6th April 2018 5% 2% 6% 3% 5% 2% 5% 2%
From 6th April 2019 8% 3% 9% 4% 8% 3% 7% 3%

 

Next Steps

These changes are obviously going to increase costs for both the employer and employee and so communication is key.  Employers should inform their employees about these changes, explaining the value of saving for retirement and the fact that the employer will also be paying more in to their plan.

For further information, please contact your usual consultant or Richard Haynes, Head of Employee Benefits and we will explain how Sanlam can help you communicate these changes to your employees.
 

Based on our understanding of tax and employment law as at June 2018.  Information provided does not constitute financial advice. 

Sanlam is a trading name of Sanlam Wealth Planning UK Ltd (Reg. in England and Wales 3879955) and English Mutual Ltd (Reg. in England and Wales 6685913). English Mutual Ltd is an appointed representative of Sanlam Wealth Planning UK Ltd which is authorised and regulated by the Financial Conduct Authority.

Registered Office: St. Bartholomew’s House, Lewins Mead, Bristol, BS1 2NH.
 

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