Work making incorrect personal contributions to pension for 24months-is there any liability on them

Tommyjw

Droppin_neutron said:

Thanks everyone for the comments. As well as not following the instruction to take 5% for personal contributions, they also were not paying the 10% employer contributions in my contract - instead only paying 1%.  They have acknowledged this and are paying one lump sum in this month to my pension pot...
I wondered if I could claim that as they had not followed the written instruction to take 5% and instead causing me to pay income tax, I might have claim to recoup the tax - but probably not... And as for being more vigilant over my payslips.... I totally get this but honestly, I never opened them!

Worth noting they technically need to put you into the position you would be in without the error.

So using made up numbers e.g. its 24x £100 a month, they shouldn't be paying in £2,400 as a lump sum, they should look at if they paid in £100 in January 2021, how many units would that have bought, based on performance what are they worth now, e.g. that £100 monthly payment may not be worth £120, so that's what they pay in, and so on and so forth each month.

Current market means them paying the lump sum now even though that's not how they should be doing it, may actually be better for you though..

Dazed_and_C0nfused

Droppin_neutron said:

Thanks everyone for the comments. As well as not following the instruction to take 5% for personal contributions, they also were not paying the 10% employer contributions in my contract - instead only paying 1%.  They have acknowledged this and are paying one lump sum in this month to my pension pot...
I wondered if I could claim that as they had not followed the written instruction to take 5% and instead causing me to pay income tax, I might have claim to recoup the tax - but probably not... And as for being more vigilant over my payslips.... I totally get this but honestly, I never opened them!

You can only ever get tax relief for the tax year the contribution is paid in so nothing you can do now for previous years.

Bimbly

Droppin_neutron said:

And as for being more vigilant over my payslips.... I totally get this but honestly, I never opened them!

This is actually very common. I was surprised at how many people I work with are the same. I think this should be a wider lesson for people to check these things at least occasionally.

I agree that if you requested a change, it is beholden on you to check it's gone through. Errors happen. It's annoying.

However, look at it this way... because of recent market doldrums, investments are cheaper. So you will get more units for the same amount of money compared to, say, a year ago. It's probably good timing - you could actually be better off!

Your employer is going to put things right by adding the lump sum. You can also up your contributions to increase your pension pot from your own finances. Then check your payslips/pension account to make sure it's all gone through!

I don't think there is much to be gained for making a greater fuss. Chalk up the not checking payslip thing to experience, save your mental energy and move on.

Albermarle

I wondered if I could claim that as they had not followed the written instruction to take 5% and instead causing me to pay income tax, I might have claim to recoup the tax - but probably not.

As already suggested if you make a lump sum contribution = to the missing contributions from you, then tax relief can be still gained.

Assuming that overall you do not contribute more ( including tax relief ) than your salary this tax year.

P1Fanatic

It definitely pays to check both your payslip and your pension statements every month. I increased my employee contribution one month only to notice that my company paid less into my pension than the month prior. After I questioned it they confirmed they had accidentally lowered my employer contribution multiplier (old vs new contracts). It all got sorted next month but can you imagine if I hadn't been checking so closely.

If you are paying via Salary Sacrifice I find it very useful to use Contribution Calculators where you enter your annual salary and then set employee and employer %'s and it shows you the total contribution and breaks it down into contributions, tax relief, NI relief etc.