Steven Cameron, Pensions Director at Aegon said: “We warmly welcome confirmation that the grants businesses can claim for furloughed employees will include an allowance for the 3% minimum employer auto-enrolment contributions, as well as employer NI liabilities on up to £2,500 a month. This will alleviate any pressure to suspend auto-enrolment contributions which even for a short period might have undermined the huge success of auto-enrolment to date. Importantly, it also avoids affecting individuals’ longer term finances. Individuals will be expected to pay their minimum contributions from ongoing pay and while they can opt out, this would mean losing valuable employer contributions.
“While employers paying above the minimum will not be able to claim back these additional amounts, including the auto-enrolment minimum in job retention grants is a very welcome demonstration of the importance the Government places on ongoing retirement savings.”
*The Government Guidance has been updated to say:
“You will receive a grant from HMRC to cover the lower of 80% of an employee’s regular wage or £2,500 per month, plus the associated Employer National Insurance contributions and minimum automatic enrolment employer pension contributions on that subsidised wage.”
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