How much must be paid into my auto-enrolment pension?
If lady luck is on your side then your employer will pay the whole amount on your behalf, but either way staying enrolled in your workplace pension makes perfect sense now and in the long term.
Can I pay in more?
If you notice that you and your employer already pay in higher contributions to your pension this could be because they use basic salary, or perhaps include bonuses as the basis for the payments. Have a chat to your employer if you want to know more.
What tax-relief do I get?
Can I opt out of auto-enrolment?
Why should I stay in my auto-enrolment pension scheme?
The fact that your employer must pay into your pension and the government puts some money in as well by giving you tax relief on what you pay in is double good news. It’s also important to remember that your savings grow virtually free of tax in your pension too.
Why was auto-enrolment introduced?
What sort of pension will I get through auto-enrolment?
Your pension scheme could be one where the money you and your employer pay in is invested. The size of your pot then depends how much has been contributed and how well your investments have performed. These schemes are known as money purchase, or defined contribution (DC) pensions. Alternatively, your pension may be the type where contributions are paid in the same way as outlined above. The difference is that you receive a guaranteed income depending on how many years you have worked for the company and your earnings at retirement, or in the years leading up to it. These schemes are known as final salary or defined benefit schemes. That’s the jargon done. Over and out!
All types of auto-enrolment schemes have to satisfy certain quality standards. The costs that you are charged for managing your pension are capped to give you value for money, which could mean you have more savings to live on when you retire. An investment fund has to be available so that your contributions can be invested, but you are free to make your own choices if you want to.
Which organisations offer auto-enrolment pension schemes?
Several house-hold name insurance companies offer auto-enrolment pension schemes. With millions of workers becoming pension members for the first time some new organisations entered the market to deal with the demand, so there’s lots of choice out there. These new providers include: