Increase in Workplace Pension Contributions – April 2018

Workplace pension contributions will be increasing in April 2018

An increase in workplace pension contributions has been scheduled for 6th April this year.

This means that both employers and their staff will need to pay more into their automatic enrolment workplace pension schemes. It is, however, the employer’s responsibility to ensure that this is implemented.

The gradual increase in workplace pension contributions is being referred to as ‘phasing’ as contributions will also rise again in April 2019 when they will reach 8% (total employer and employee contributions). This phased increase has been planned since the Auto Enrolment process started.

Please see a full breakdown of the phased increase in workplace pension contributions below:

Up to 5th April 2018

Employer minimum contribution = 1%, Employee minimum contribution = 1%, Total minimum contribution = 2%.

6 April 2018 – 5 April 2019

Employer minimum contribution = 2%, Employee minimum contribution = 3%, Total minimum contribution = 5%.

6 April 2019 Onwards

Employer minimum contribution = 3%, Employee minimum contribution = 5%, Total minimum contribution = 8%.

The increase in workplace pension contributions clearly comes with a substantial cost for businesses. For example, a business with 50 employees will see costs change from £9k to £27k per year.  This is based on a business currently applying minimum contributions and the average employee salary being £1500 per month.

What is Innes Reid doing to help? 

Innes Reid would like to make all of our clients and connections aware of this upcoming change and remind you that we’re here to help you prepare for this.

So, if you have not yet fulfilled your obligations and would like some support, do not hesitate to give us a call on 01244 347583 or email us at:

Further information and tips from Innes Reid: 

Choose to pay more

Both the employer and employee can choose to pay more than the minimum contributions if they wish.

No increase = no longer qualifies for AE

If a pension scheme does not increase its minimum contribution levels in line with the legal requirements, it will no longer be a qualifying scheme for existing members and cannot be used for automatic enrolment.

Trustees and providers should check that software is suitable 

Pension scheme trustees and providers, and payroll and software providers, should ensure their products support this legal requirement of automatic enrolment.

Communicating to staff (Template Letter)

If you’re an employer, you can communicate the changes with your staff by clicking here and downloading a useful template letter from the Pensions Regulator which explains the increase in workplace pensions contributions.

Further Information

Further information on the increase in workplace pension contributions can be found on the Pension Regulators website here.

For advice on any aspect of the Auto Enrolment process, give us a call on 01244 347583 or email us at

Think your network will find this article helpful? Instantly share it with them via the social share buttons below. 

Ready to connect? Start your journey today
  • This field is for validation purposes and should be left unchanged.
Innes Reid profile
The Financial Ombudsman Service (FOS) is an agency for arbitrating of unresolved complaints
between regulated firms and their clients. Further details of the FOS can be found on its website:
© 2023 Innes Reid