Varied Employer Pension Contributions

Robster88

Hello,

This may be an odd question but couldn’t find an answer to it anywhere. 

My current employer contributes 5% of my total salary into a Nest Pension. I also contribute 5%. 

This is above the minimum requirement, which I understand would be 3% of my salary above £6,240. 

Due to the cost of living increase that everyone is facing at the moment I am looking at ways to get more money in my pocket each month. I know it’s very short sighted because of the tax benefits of putting money into a pension, however I was wondering whether if I asked my employer to reduce the amount they put into my pension to the minimum, any money they save by doing that could instead be used to facilitate a pay rise. 

I know the company would find it difficult to increase my salary otherwise, however this would mean that the total cost to them wouldn’t change. I would lose out in the long rung, but it would mean more money at the moment when I need it. 

I was wondering however whether this varied approach would be allowed, or whether if they changed my pension to be 3% over £6,240, they would have to change everyone else’s to be the same? 

Cheers 

penners324

Very unlikely. 

Marcon

Robster88 said:

Hello,

This may be an odd question but couldn’t find an answer to it anywhere. 

My current employer contributes 5% of my total salary into a Nest Pension. I also contribute 5%. 

This is above the minimum requirement, which I understand would be 3% of my salary above £6,240. 

Due to the cost of living increase that everyone is facing at the moment I am looking at ways to get more money in my pocket each month. I know it’s very short sighted because of the tax benefits of putting money into a pension, however I was wondering whether if I asked my employer to reduce the amount they put into my pension to the minimum, any money they save by doing that could instead be used to facilitate a pay rise. 

I know the company would find it difficult to increase my salary otherwise, however this would mean that the total cost to them wouldn’t change. I would lose out in the long rung, but it would mean more money at the moment when I need it. 

I was wondering however whether this varied approach would be allowed, or whether if they changed my pension to be 3% over £6,240, they would have to change everyone else’s to be the same? 

Cheers 

The only person who can answer your question is going to be your employer - nothing lost by asking them.

How are your own pension contributions made? If your employer doesn't operate a salary sacrifice scheme, this might be the moment to ask them. Both employer and employee save NI, so well worth raising the point. See https://www.moneyhelper.org.uk/en/pensions-and-retirement/building-your-retirement-pot/salary-sacrifice-and-your-pension

JoeCrystal

penners324 said:

Very unlikely. 

Actually, it is worth asking the company. That is what my employer did a few years ago when they downgraded from basing on whole earnings to only above £6,240 in order to save money... I do agree with you that it is very unlikely though for only one employee.

Robster88

penners324 said:

Very unlikely. 

Very unlikely that it’d be allowed at all or very unlikely it would could be done on an individual basis? 

Robster88

Marcon said:

Robster88 said:

Hello,

This may be an odd question but couldn’t find an answer to it anywhere. 

My current employer contributes 5% of my total salary into a Nest Pension. I also contribute 5%. 

This is above the minimum requirement, which I understand would be 3% of my salary above £6,240. 

Due to the cost of living increase that everyone is facing at the moment I am looking at ways to get more money in my pocket each month. I know it’s very short sighted because of the tax benefits of putting money into a pension, however I was wondering whether if I asked my employer to reduce the amount they put into my pension to the minimum, any money they save by doing that could instead be used to facilitate a pay rise. 

I know the company would find it difficult to increase my salary otherwise, however this would mean that the total cost to them wouldn’t change. I would lose out in the long rung, but it would mean more money at the moment when I need it. 

I was wondering however whether this varied approach would be allowed, or whether if they changed my pension to be 3% over £6,240, they would have to change everyone else’s to be the same? 

Cheers 

The only person who can answer your question is going to be your employer - nothing lost by asking them.

How are your own pension contributions made? If your employer doesn't operate a salary sacrifice scheme, this might be the moment to ask them. Both employer and employee save NI, so well worth raising the point. See https://www.moneyhelper.org.uk/en/pensions-and-retirement/building-your-retirement-pot/salary-sacrifice-and-your-pension

Thanks - and yes I will ask my employer. I was wondering whether there was a rule or regulation preventing it, or whether it would just be down to them to either allow it or not. 

And thanks I will look into salary sacrifice. 

Marcon

Robster88 said:

Marcon said:

Robster88 said:

Hello,

This may be an odd question but couldn’t find an answer to it anywhere. 

My current employer contributes 5% of my total salary into a Nest Pension. I also contribute 5%. 

This is above the minimum requirement, which I understand would be 3% of my salary above £6,240. 

Due to the cost of living increase that everyone is facing at the moment I am looking at ways to get more money in my pocket each month. I know it’s very short sighted because of the tax benefits of putting money into a pension, however I was wondering whether if I asked my employer to reduce the amount they put into my pension to the minimum, any money they save by doing that could instead be used to facilitate a pay rise. 

I know the company would find it difficult to increase my salary otherwise, however this would mean that the total cost to them wouldn’t change. I would lose out in the long rung, but it would mean more money at the moment when I need it. 

I was wondering however whether this varied approach would be allowed, or whether if they changed my pension to be 3% over £6,240, they would have to change everyone else’s to be the same? 

Cheers 

The only person who can answer your question is going to be your employer - nothing lost by asking them.

How are your own pension contributions made? If your employer doesn't operate a salary sacrifice scheme, this might be the moment to ask them. Both employer and employee save NI, so well worth raising the point. See https://www.moneyhelper.org.uk/en/pensions-and-retirement/building-your-retirement-pot/salary-sacrifice-and-your-pension

Thanks - and yes I will ask my employer. I was wondering whether there was a rule or regulation preventing it, or whether it would just be down to them to either allow it or not. 

And thanks I will look into salary sacrifice. 

Providing your employer pays the minimum contribution (on the basis you'll pay yours), and does nothing to entice you to actually leave the pension scheme completely, that's one bit of legislation satisfied. 

Employers do not have to treat all employees the same way provided that any 'differences' are not based on unlawful discrimination.