National minimum rate and pension changes from April 2018

Date: 22nd March 2018
Author: Colin Walker

In April there will be changes to both National Minimum Wage and pensions contributions. The minimum wage will increase from £7.50 per hour to £7.83 per hour for over 25 year olds. Below is a breakdown for all age levels.


Age Group April 2017 April 2018
25+ £7.50 £7.83
21-24 £7.05 £7.38
18-20 £5.60 £5.90
16-17 £4.05 £4.20
Apprentice £3.50 £3.70


As well as the change to the National Minimum Wage, the planned increase in employer and employee pension contributions comes into place.

Over the last few years all employers have been required by law to automatically enrol their employees into workplace pension schemes. Although it is possible for the employee to opt out, most employees have welcomed the opportunity to save towards their own pension, knowing that the employer is also contributing.

Currently all staff in these workplace pension schemes pay a minimum of 1% of their earnings into their pension scheme and their employer matches that by also paying a minimum of 1%. In April, these amounts will change. Employers will now need to pay at least the equivalent of 2% of the employee’s earnings into the scheme whilst the employee contribution will increase to 3%, effectively adding 5% of the employee’s salary to the pension scheme each year.

In 2019 these figures will increase again, with the employer needing to contribute 3% and the employee’s contribution rising to 5%, so that a total of 8% of the employee’s salary is invested in a pension scheme.


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