On 6th April 2018, the minimum amount you pay into your pension contribution is set to rise from 1% to 3%. Similarly the following year, this is set to rise by additional 2%.
The additional minimum amount contributed by your employer is set to rise by 1% for the next two years.
If you’re an employer you have the legal right to make these changes. Failure to do so can result in a fine.
How will the increase effect me?
If you have been auto-enrolled into a pension scheme, such as NEST, your employer is obligated to make sure these changes are implemented. Your employer may choose to make these payments themselves, in which case, it won’t cost you anything. They may choose to do this as an incentive. For most small – medium sized companies however, only the minimum amount is viable. You will be expected to make up the remaining minimum amount.
You can opt of this scheme if you wish, though you would be forfeiting any additional amount paid in by your employer.
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