PAYROLL SOLUTIONS - PENSIONS

Are you aware that there is an increase in Automatic Enrolment contributions with effect from April 2019? At Stipendia they encourage their team to save for their futures. Stipendia are looking forward to Liam joining the Automatic Enrolment Company Pension Scheme this month as he has reached qualifying age (22 years). Both Liam and Stipendia will contribute to the scheme. Liam will be entitled to tax relief on his contribution, too! Currently the total contributions are a minimum of 5% of qualifying earnings; employers pay a minimum of 2% and employees paying the balance.

This is to increase on 1st April 2019 to a total of 8%, with employers paying a minimum of 3% and employees the balance.

Date                   Employer                    Employee                    Total
                           minimum                     minimum                     minimum
April 6th 2018 -  2%                               3%                               5%
April 5th 2019
April 6th 2019 -  3%                               5%                               8%
onwards

What are Qualifying Earnings?
This is the bank of earnings that are used to calculate contributions and for the 2018/19 tax year this is between £6,032 and £46,350 a year. This means that qualifying earnings cannot be more that £40,318 (£46,350 less £6,032).

Who is Eligible?
Anyone who is over 22 years of age and earns over £10,000 per annum will automatically go into an Automatic Enrolment scheme.

What if I am under 22?
You can opt into the pension scheme by contacting either the pension provider or your employer.

What if I want to leave the pension scheme?
If you want to leave the scheme with in the first 4 weeks of being enrolled you can “opt out” of the pension, however this means that you will not receive any contributions from your employer. You can do this by contacting the pension provider only. You will receive a refund of your contributions made.

If your personal circumstances change and you decide to leave the scheme after the first 4 weeks, your pension pot will be frozen until you decide to start taking your pension or lump sum.

It is always recommended that you save for your future.

If you would like more details on how to link the pension to payroll, or are struggling and need help, please contact Liam, Katherine or Lynne at Stipendia Payroll Solutions 0845 308 2288.