April’s auto-enrolment increases go smoothly

April’s auto-enrolment increases go smoothly

Millions of workers across the UK have found extra cash to put into a pension, quashing worries that opt-out rates would increase when higher contribution rates began in April. A survey conducted on behalf of The Pensions Regulator (TPR) found that among those employers that implemented the April 2018 increase in minimum contributions, the mean proportion of members leaving a scheme was only 1.8% for micro, 1.7% for small and 0.9% for medium employers.[1] With more than 90% of firms stating that none of their staff asked to leave when contributions were increased from 2% to 5%.

Most employers found implementing April 2018 increase easy

Employers of all three sizes (micro, small and medium) generally found the process of implementing the changes ‘easy’. The minority that found the process difficult highlighted issues with making changes on their payroll software, finding the time, a lack of support and difficulty calculating the increased contributions.

Awareness of 2019 increases is high

Most employers were aware that pension contributions would increase again in April 2019 (64% of micro, 83% of small and 96% of medium). This is a significant increase on last Spring’s survey (+20 percentage points for micro, +19 for small and +28 for medium employers).

Employers generally positive about increases

The majority of employers thought that the April 2018 and upcoming 2019 increases in minimum contribution levels were a good idea (59% of micro and small, and 74% of medium employers). However a third of employers of all three sizes stated that they would find it difficult to afford the increased minimum employer contribution levels.

And finally…

It’s yet to be seen whether the final increase next year will be the straw which breaks the camel’s back in relation to opt-outs but it’s encouraging that most employers are continuing to find their ongoing duties easy to manage and employees are staying enrolled. This news together with employers generally positive attitude towards the increases will go a long way towards the continued success of auto-enrolment. If you have any further questions please contact your Aspira Corporate Adviser or call the office on 0800 048 0150.      


[1] Ongoing Duties Survey – Summer 2018, www.thepensionsregulator.co.uk, viewed 22/10/18

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