Under workplace pension rules that came into effect in 2012, depending on your age and salary, your employer must automatically contribute a percentage of your earning into your pension every payday. Your employer is required make a minimum contribution and you must make up the difference.
From 6th April 2019, the minimum amount your employer is required to save into your pension pot increased. If you and your employer used to contribute a minimum of 3% and 2% of your qualifying earnings respectively, then this will have affected you*.
Your contribution rate increased from 3% to 5% and from 2% to 3% for your employer. This means that each month you will get a total of 8% of your qualifying earnings paid into your pension savings pot. The increase is great news as it will help give you a more comfortable life in retirement.
* If you and your employer were already paying more than the minimum then this change wouldn’t have affected you.
Did you know that:
– The earlier you begin saving, the more time your savings have to grow. You can also choose to save more than the minimum if you wish, (known as an additional voluntary contribution). To do this, you can either speak to your employer or login to your online member account
– The money will remain yours, including the contributions made by your employer, even if you change jobs. You are free to either transfer your pension savings to another pension provider or simply leave it invested until you choose to retire.
– From age 55, you will be able to choose how to use your pension savings.
Watch this short video below to find out more about how the change benefits you.
To learn more about the value of having a workplace pension, please watch this video here.