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Pension contribution increase to hit pay packets

Since 2012, 10 million eligible workers have been automatically signed up to workplace pensions. From April, contributions will rise from 3% of salary to 5%.

Analysis carried out for the BBC by Hargreaves Lansdown suggests the annual take-home pay of someone earning £15,000 will typically be £49 lower, if they pay contributions on their entire salary. Someone on £30,000 will take home £253 less. The hit to net pay could have been bigger, but a tax cut for most earners will soften the blow of higher auto-enrolment contributions. The personal allowance is due to increase to £12,500 from April.

Employers' minimum contributions are also due to increase in April from 2% to 3% of a workers' salary. All employers with staff in a pension scheme for automatic enrolment must take action to make sure at least the minimum amounts are being paid into their pension scheme. This applies to you whether you set up a pension scheme for automatic enrolment or you decided to use an existing scheme.

Read The Pensions Regulator - Increase of automatic enrolment contributions