The 2018/2019 tax year is here. What impact does this have on Auto Enrolment?

Have you made the necessary changes to payroll, procedure and communications that the new tax year has prompted? In brief, it is necessary to incorporate the new tax and auto enrolment thresholds, and the increase in minimum contributions for auto enrolment into your current processes.

Considering how any potential issues or problems arising from these changes, and what action, if any, should be taken by you or your employees is an important part of any tax year changes. In the third of three articles, we pay particular attention to the impact on Auto Enrolment.

Important changes to Auto Enrolment (AE) for 2018/19

At the core of auto enrolment is the criteria which defines who is an eligible jobholder and must be auto enrolled into a Qualifying Workplace Pension Scheme (QWPS); who is a non-eligible jobholder and can chose to be enrolled into a QWPS; and who is an entitled worker and can request to be enrolled into a pension plan (which does not have to be a QWPS, and does not need to have employer contributions). This criteria is currently based upon age, and also various earnings thresholds, some of which have changed with effect from 6 April 2018.

The table below outlines the new AE earnings thresholds. It is vital that employers now assess their workforce using the new earnings thresholds and take the appropriate action. In addition, if paying contributions on Qualifying Earnings, the new earnings thresholds must be used (earnings between £6,032 and £46,350).

If you use the online ‘Pension Regulators Assessment Tool’, this has been updated for the new tax year but it may be useful to check thresholds if you use alternative tools.

AE Earnings Thresholds for 2018/2019

Increases to minimum contributions for AE

The first of two scheduled increases to the minimum contributions required for AE came into effect on 6 April 2018. It is essential that, depending upon which criteria was used to become a QWPS , the new contribution rates are paid from April 2018 in order to maintain qualifying status.

Those using contractual enrolment to meet AE duties should also ensure that the pension scheme continues to meet the criteria to be a QWPS. This includes making contributions no less than the new minimum requirements.

Any amendments to payroll, and pension contribution schedules, required to facilitate these changes, need to be done as soon as possible if not already in place.

The table of new minimum contribution rates and proposed dates is shown below.


 You can read our other articles about the 2018 / 2019 tax year and the impact on pensions here:

1. The 2018/2019 tax year is here. What impact does this have on your pension contributions?

2. The 2018/2019 tax year is here. What impact does this have on your workplace pension?