If you have a workplace pension, then you may receive communication from your pension provider informing you of the upcoming changes to minimum contribution rates, effective from April 2019.
Currently (2018/19), the total minimum contributions are 5%, with the employer typically contributing 2% and the employee 3%.
From April 2019, the total minimum contribution will increase to 8%, typically 3% employer and 5% employee.
If you want to communicate details of these changes to your employees, see below for a proforma letter which might help …
[Employee name and address]
[Date]
Dear [name of employee]
Minimum workplace pension contributions are to increase soon
We are writing to you to inform you that the minimum amount paid into your workplace pension, both by you and us, is due to increase. This is a UK-wide change, involving millions of people and employers. The increases, which are a legal requirement, are due to take place in April 2019.
Currently (2018/19), the total minimum contribution is 5%, of which the employer minimum contribution is 2% (employee minimum – 3%).
From 6 April 2019, the total minimum contribution will be 8%, of which the employer minimum contribution will be 3% (employee minimum – 5%).
You can choose to contribute more than the minimum amount, if you wish.
Workplace pensions are a simple way to help you save for the future, so you will have more money when you retire. The earlier you start to save, the more money you will have when you retire, as your money has had time to grow.
If you want more information on workplace pensions, you can find it at:
http://www.workplacepensions.gov.uk/employee/
Your sincerely
[Name of employer]
Information in this publication is intended to provide only a general outline of the subjects covered. It should neither be regarded as comprehensive nor sufficient for making decisions, nor should it be used in place of professional advice. Whyatt Accountancy accepts no responsibility for any loss arising from any action taken or not taken by anyone using this material.