Automatic Enrolment Changes
The Pensions Regulator have taken steps to simplify the assessment classifications of your workers. Prior to these changes, an employee could either be an entitled worker, a non-eligible jobholder or an eligible jobholder based on their age and gross earnings. These classifications have now been changed to Type 1 and Type 2 employees.
- Type 1 (originally eligible jobholders): Employees that are aged between 22 and State Pension age and earn in excess of £833 per month (£192/week)
- Type 2 (originally entitled or non-eligible jobholders): Employees that are aged 16-21 or between State Pension age and 74 or who earn less than £833 per month (£192/week)
Type 1 employees need to be automatically enrolled in to your pension scheme whereas Type 2 employees do not.
To coincide with the start of the tax year, the dates at which increases to the minimum contributions are due to take effect have (provisionally) been amended – subject to a Parliamentary review.
- 6th April, 2018 to 5th April 2019 (originally October 2017 to September 2018): Employer minimum contribution 2% and total minimum contribution 5%.
- 6th April, 2019 onwards (originally from October 2018 onwards): Employer minimum contribution 3% and total minimum contribution 8%.
Please get in touch if you require any assistance when setting up or administering your automatic enrolment pension scheme.