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Minimum Pension Contributions to Rise – update on the latest changes

Next month sees the introduction of increases to the minimum pension contributions into qualifying pension schemes.

To explain this regulatory update in more detail I am pleased to introduce this article by Suzanne Blundell of Curo Chartered Accountants, written with Boardside’s clients in mind. 

Suzanne explains that from 6th April 2018, overall minimum contributions into qualifying pension schemes are set to increase. There will be a further rise in  April 2019 and for some employees the increase will be significant

Suzanne writes:

The current rates and contributions for the next 2 tax years are as follows:


Date effective                   Employer min. cont’n                  Staff  cont’n                      Total
Until 5 April ’18                  1% 1% 2%
6/4/18-5/4/19                    2% 3% 5%
6/4/19 onwards                  3% 5% 8%


Note that the employer must contribute a minimum amount and that overall a minimum level of contribution should be met. There is no requirement for the employee to contribute anything if the employer pays in full the total minimum contribution.

It can be seen however, that in many cases, employees will move from making 1% contributions to 5% in 2019. We are urging people to be aware of this and encouraging them to make provisions for these changes.

Both employers and staff are permitted to pay in more than the minimum contributions if so desired (with an upper limit of £40,000 contributions per annum).

It is important that if you operate a payroll scheme on behalf of your employees, that you ensure the correct rates are applied and the right amounts are paid into the qualifying scheme.

There are rules concerning pension schemes which aren’t qualifying and therefore cannot be used for automatic enrolment.

With thanks to Suzanne for her explanation and for further information on pensions auto enrolment please visit