What you pay

Depending on your Pensionable Salary you either pay:

  • 6% if you earn below £46,425*; or
  • 7% if you earn above £46,425*.

These payments are known as your pension contributions and are deducted from your pay automatically. You get full tax relief on your contributions (under current law) subject to your pension savings not exceeding the Annual Allowance.

For example, if your salary is taxed at the basic rate of 20%, each £1 you pay into the Scheme costs you 80p. In comparison, if your salary is taxed at 40%, each £1 you pay into the Scheme costs you 60p, and if taxed at 50% each £1 paid into the Scheme costs you 50p.

You will stop paying contributions to the Scheme if you leave the Company when you retire or opt of the Scheme, whichever is the earlier.

You will also pay National Insurance (NI) contributions. These are explained under NI Contributions.

 

* £46,425 is the CET or Contribution Earnings Threshold for the 2011/12 tax year and is reviewed annually. Your Pensionable Salary will be compared to the CET at 1 January each year and you will pay the applicable contribution rate from your next pay review date.

The higher contributions for those with earnings above the CET reflect the higher tax relief that higher earners receive on their pension contributions.

Frequent questions

Please click on the appropriate section: