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c4j Workplace Pensions

WORKPLACE PENSIONS

 
All employers must provide a workplace pension scheme. This is called ‘automatic enrolment’.
Your employer must automatically enrol you into a pension scheme and make contributions to your pension if all of the following apply:

When your employer does not have to automatically enrol you

Your employer usually does not have to automatically enrol you if you do not meet the previous criteria or if any of the following apply:

You can usually still join their pension if you want to. Your employer cannot refuse.

How much do I and my employer have to pay?

The minimum total contributions under automatic enrolment have been set down by the Government and have been increasing up to 6 April 2019.

Your employer must pay some of the minimum total contribution. If the employer doesn’t pay all of the minimum total contribution, you will need to make up some of the difference. The Government will also pay into your pension pot by giving you tax relief on your contributions However, even if you don’t pay Income Tax, you’ll still get tax relief if your pension scheme uses relief at source to add tax relief to your pension pot.

The minimum total contribution to the scheme is usually based on your ‘qualifying earnings’.  These are your earnings from employment, before income tax and National Insurance contributions are deducted, that fall between a lower and upper earnings limit that are set by the Government (£6,240 to £50,270 for the tax year 2021/22). Earnings from employment can include your wages or salary, commission, bonuses, to name a few.

If your employer decides to pay only the minimum amount, the minimum total contribution, as a percentage of your qualifying earnings is:

Date Your employer pays: You pay: The Government adds tax relief of: Total contribution:
From 6 April 2019 3.0% of your qualifying earnings 4.0% of your qualifying 
earnings 
1.0% of your qualifying 
earnings 
8.0% of your qualifying 
earnings 
6 April 2018 to 5 April 2019 2.0% of your qualifying earnings 2.4% of your qualifying 
earnings 
0.6% of your qualifying 
earnings 
5.0% of your qualifying 
earnings 
Up until 5 April 2018 1.0% of your qualifying earnings 0.8% of your qualifying 
earnings 
0.2% of your qualifying 
earnings 
2.0% of your qualifying 
earnings