Pension amounts don’t seem right

itsthelittlethings

Hi, could someone just reassure me about my pension deductions. They don’t seem right even allowing for them being taken after tax etc has been deducted.

Total wages 2166.67
Tax 224.60
NI 89.49
Postgraduate loan 25
Employee pension 65.87
Emoloyer pension 49.41

I can’t seem to make those pension amounts add up to 8%. What’s going on?

Thanks.

Dazed_and_C0nfused

itsthelittlethings said:

Hi, could someone just reassure me about my pension deductions. They don’t seem right even allowing for them being taken after tax etc has been deducted.

Total wages 2166.67
Tax 224.60
NI 89.49
Postgraduate loan 25
Employee pension 65.87
Emoloyer pension 49.41

I can’t seem to make those pension amounts add up to 8%. What’s going on?

Thanks.

I suspect your employer has applied the earnings thresholds.

And your contribution is only 4%, the extra 1%, being the basic rate tax relief that is added by the pension company (you can check this in your pension account).

2166.67 - 520 = 1646.67

1646.67 x 4% = 65.87
1646.67 x 3% = 49.40

https://www.thepensionsregulator.gov.uk/en/employers/new-employers/im-an-employer-who-has-to-provide-a-pension/declare-your-compliance/ongoing-duties-for-employers-/earnings-thresholds

itsthelittlethings

Thanks. That’s annoying.

Dazed_and_C0nfused

itsthelittlethings said:

Thanks. That’s annoying.

True.  You can adjust your % to get more into your pension but chances are if your employer is using the earnings thresholds they aren't going to match any extra contributions you make.

Marcon

Your employer isn't offering salary sacrifice by the look of things. That might be something you can suggest to them, pointing out that they get an NI saving as well as the employees? Straightforward explanation here: https://www.moneyhelper.org.uk/en/pensions-and-retirement/building-your-retirement-pot/salary-sacrifice-and-your-pension

Employees must still be paid in accordance with minimum wage requirements, so can't salary sacrifice in a way which would take them below this legal minimum - so if the majority of employees are on minimum wage rates, that might explain why your employer hasn't gone down this route.