Increases in auto-enrolment contributions have been pushed back by six months, meaning the full combined 8 per cent of contributions will not be mandatory until April 2019.
The move was outlined in Chancellor George Osborne’s Autumn statement, delivered to the House of Commons today. Osborne told MPs the delay had been introduced to help employers with the administration of the increase.
The increase in the employer minimum contribution from 1 to 2 per cent and the total minimum contribution increase from 2 to 5 per cent will now take place in April 2018, rather than October 1, 2017 as had previously been planned. The further employer contribution increase to 3 per cent and total contribution increase to 8 per cent will now happen in April 2019.
Osborne said: “Over 5 million people have already been auto-enrolled into a pension thanks to our reforms in the last parliament.
“To help businesses with the administration of this important boost to our nation’s savings, we’ll align the next two phases of contribution rate increases with the tax years.”