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Pension payments hike around the corner, reminds Newby Castleman

An imminent increase in the amount paid towards staff pensions could catch out employees and businesses next month, accountancy firm Newby Castleman has warned.

Staff paying the minimum contribution from their salary into their workplace pensions will see the amount they pay increase from 1% to 3% with effect from April 2018, whilst their employer’s contribution to the scheme will double from 1% to 2%. A further increase is set for the same date next year.

 

Employees who are in an auto enrolment scheme and contributing less than the new minimum amount will automatically be moved to the new rates next month. Staff who are already contributing more than the new minimum amounts will not be affected.

Annalise Lovett, Partner at Newby Castleman, believes some staff and employers may not be prepared for this change.

She said,

“If you have not budgeted for this automatic legislative increase to the workplace pension, whether you’re an employee or an employer, you might be caught out by next month’s change.

“Many employers will have been paying the minimum contribution for a number of years, and for companies with several staff on their books, the upcoming increase may come as a shock. It is therefore important that all employers are aware of the forthcoming increases and plan ahead accordingly.”

Newby Castleman is one of the Midlands’ leading independent accountancy firms, with offices in Leicester and Loughborough. It offers a range of specialist financial services, business and tax advice for individuals and businesses.


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