NEST Contributions

OneLife_OneShot

Hi

I am hoping someone can help. I think my minimum NEST contributions are wrong but I am hoping someone could tell me if the below looks correct, please? My employer is not being very helpful.

Gross before tax - £2119.80

Contributions -

£63.95 my salary

£47.96 employer

It says it should be 5% of my wage but that is almost £105, am I missing something here?

NoMore

Auto Enrollment ?

The employer only has to base contributions on earnings between £6240 and £50270 per year. So its likely down to that.

MX5huggy

Probably, the first £6240 can be disregarded for pension contributions.

https://www.moneyhelper.org.uk/en/pensions-and-retirement/auto-enrolment/how-much-do-i-and-my-employer-have-to-pay

These are a section of your earnings before Income Tax and National Insurance contributions are deducted. For the 2022-23 tax year this is everything over £6,240 and up to £50,270.

Marcon

Your contributions are being made based on 'qualifying earnings', which means the first £6,240 earnings per annum won't be included.

This reduces your monthly pay on which contributions are made to £1,599.80. You contribute £63.95 and NEST adds basic rate tax relief (20%) on your behalf to your 'pot', which makes £63.95 x 1.25 = £79.94. 

£79.94 is 5% of your qualifying earnings.

Albermarle

As above the first £6240 of your salary does not count, and if you then add on the tax relief that NEST add, it works out exactly at 5%.
Many employers will not deduct the £6240 and just pay on the full salary.
Also some will contribute more than the statutory 3% themselves.
You can also opt to pay more if you want.

OneLife_OneShot

Ah okay, this makes much more sense now. 

Many thanks for all your help!

Dazed_and_C0nfused

OneLife_OneShot said:

Ah okay, this makes much more sense now. 

Many thanks for all your help!

It's a little annoying but you should have the option to increase your % to get where you thought you'd be.

And you'll still get the tax relief and may even find your employer matches some or all of your increased contributions 😀

xylophone

you should have the option to increase your % to get where you thought you'd be.

https://www.nestpensions.org.uk/schemeweb/memberhelpcentre/contributions/make-additional-contributions.html