Auto-enrolment contributions to increase
The contribution you make to your pension is set to increase on the 6th of April of this year. Both you and your employer will pay an increased amount of 8% through auto-enrolment rather than 5% as in recent years. This increase in contribution equates to an increased amount of 5% of your salary being paid in to your workplace pension, up from 3%.
| Date | Employer Minimum Contribution | Employee Contribution | Total Minimum Contribution |
|---|---|---|---|
| New rate: 6 April 2019 onwards | 3% | 5% | 8% |
| Current rate: 6 April 2018 to 5 April 2019 | 2% | 3% | 5% |
Someone earning the average wage in the UK of £28,759 will be paying £75.41 from the 6th April, which is £29.96 more than the current rate. Opting out of auto-enrolment may sound a tempting option for some, however, by doing so, you are essentially turning down both your employer’s contribution and tax relief from the government, which is free money and could help to grow your pension pot. Another useful benefit of saving through enrolment, is that you could be earning investment returns on your money, which will help your pension pot to grow.
With the State Pension ages set to increase these small increased contributions through Auto Enrolment could pay dividends to your future.