The increase in the minimum pension contribution rates for employers and employees required under the forthcoming pension reforms will be delayed from 1 October 2016 to 1 October 2017.
This delay is to account for the fact that auto-enrolment staging dates for small and medium-sized employers have been pushed back to take place between 1 June 2015 and 1 April 2017.
The final increase in contributions as set out under the reforms will now take effect from 1 October 2018.
This means the minimum increase rate of employer pension contributions from 1% to 2% of banded earnings will be delayed from October 1, 2016 to October 1, 2017. Employer contributions will then increase to 3% from October 1, 2018.
Brendan Barber, general secretary of the Trades Union Congress, said: “Today’s announcement does not just hit the staff of small employers. What is worse is that even workers auto-enrolled this year will now have to wait until the end of the staging process before they get their full contribution.
“This is because contributions are being phased in, with the final stage delayed until 2018 – thirteen long years after the Pensions Commission recommended auto-enrolment.”
For more articles on complying with the 2012 pension reforms
