Pensions auto enrolment - what does it mean for you?

What does Auto Enrolment mean for you?

If you are auto-enrolled the payments into your pension will be as follows: 

• Your contribution (together with tax relief) – an amount equal to 1% of your pensionable pay. This will be taken directly from your pay.

• Our contribution – an amount equal to 1% of your pensionable pay.
• The government is also contributing to your pension through tax relief. (Tax relief means that some of your money that would have gone to the government as tax, goes into your pension instead.)
• On your payslip, the figure you can see is your contribution and the tax relief added together.

Please note: Pensionable Pay, is the part of your pay that is used to work out your pension and pension contributions. 

This means, for example, if your pensionable pay in one year is £15,600: 

• You will pay in £13 a month or £3 a week depending on how often you are paid. This will be taken directly from your pay before tax is deducted.
• We will pay in £13 a month or £3 a week depending on how often you are paid.
• The government, in allowing your deduction to be taken from earnings before tax is deducted, is granting tax relief on the £13 per month or £3 per week you pay into the pension scheme.

Therefore, although you might put in £3 per week, the total contribution to your pension pot will be £6 per week. 

Remember, if you earn more or less than £15,600 a year, the actual contributions for you will be higher or lower. 

Please note: On your payslip, the figure you will see is your contribution and the tax relief added together. 

And please note: the value of tax relief might change, as various factors might affect it. For example, if your earnings are close to one of the tax band levels.