Pension contributions to increase from April 2018
Thursday 5th April 2018
Contractors within Sterling’s Umbrella scheme will soon see some changes in their pension contributions, as they are set to rise from 6th April 2018.
This will mark the first rise in contributions since the introduction of the government’s workplace pension scheme, that requires businesses to provide a pension for their employees that both the employee and the company will contribute towards (unless an employee chooses to opt-out). Employers must provide these pensions or risk hefty fines by the Pensions Regulator.
Whilst employers and employees are able to contribute more than required, there are minimum contribution guidelines as outlined by the Pensions Regulator. These minimum contributions will increase each year until 2019, at which time they will be 8% of monthly earnings. The purpose of the workplace pension is to provide employees with the opportunity to start building savings for when the time comes to retire.
In order to be eligible to contribute towards a workplace pension, a worker must:
- Be aged between 22 and State Pension age
- Earn at least £10,000 per year
- Work within the UK
The pension contributions from 6th April will be as follows:
- Employer minimum contribution (Sterling) – 2%
- Staff contribution (Umbrella contractors) – 3%
- Total contribution – 5%
For contractors using our Umbrella scheme, they will be automatically enrolled onto our chosen pension scheme after a period of 12 weeks.
About NEST pensions
Our chosen pension provider is NEST, a pension scheme established by the government to ensure that the auto-enrolment process runs smoothly. You can learn more about NEST pensions by visiting their website.