If you are employed and paying into a Workplace Pension, you should be advised by the
provider or your employer that the minimum payments will increase from 6 April 2018.
Currently the minimum payments have been 1% of salary by the employee and 1% by the
employer. These will increase to 3% by the employee and 2% by the employer. A person earning
£20,000 per annum (and with a scheme where the full pay is used to calculate the payment) would
see an increase in their deduction from about £14.00 per month to about £40.00 per month. While
that is a large increase, if you take into account what the Government adds and what the employer
adds, that £40.00 paid in would mean a total of about £84.00 going into the pension – a return of
210%! It is something to be aware of and budget for.
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