Pension contribution taken from before tax or after?

treadstone66
treadstone66 Posts: 21 Forumite
in Pensions, annuities & retirement planning
Hi All
I'm a teacher, my salary is £35,200.
I have asked HR if I can put more into my pension from my monthly wage. They have said that I am putting in the maximum which they say is 6%.
According to salary tiers and contribution rates set out online, I should be able to put in 9.6% as I fall within the £35,000 to £41,499.99 bracket.

Before I go back to HR, I just want to clarify that the 6% of my contribution is taken from before deductions are made ?
Thanks for any replies
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Comments

  • Brynsam
    Brynsam Posts: 3,643 Forumite
    First Anniversary Name Dropper Combo Breaker First Post
    treadstone66 wrote: »
    Before I go back to HR, I just want to clarify that the 6% of my contribution is taken from before deductions are made ?

    Yes, the 6% is taken from gross pay.
  • xylophone
    xylophone Posts: 44,331 Forumite
    Name Dropper First Anniversary First Post
    I'm a teacher, my salary is £35,200.


    I should be able to put in 9.6% as I fall within the £35,000 to £41,499.99 bracket.


    https://www.teacherspensions.co.uk/employers/managing-members/contributions/calculating-contributions.aspx

    You seem to fall into the (18-19)

    £27,048 to £36,410.99 band?

    This seems to be 8.6%?
  • xylophone
    xylophone Posts: 44,331 Forumite
    Name Dropper First Anniversary First Post
    https://www.atl.org.uk/Images/adv80b-tps-2015-eligibility-contributions-benefits.pdf

    You pay pension contributions out of your gross pay
    (before deduction of income tax), so the net cost of
    joining the TPS is usually reduced by 20%. If you pay
    tax at the higher rate, you save even more. Your
    employer also contributes towards your pension.
  • greatkingrat
    greatkingrat Posts: 324 Forumite
    First Anniversary First Post
    The Teachers Pensions Scheme is a defined benefits scheme, the pension you get is not directly linked to the contribution percentage that you pay, so there is no advantage to you in paying any more than you have to.

    However if you want to increase your pension, there are options to purchase additional pension or opt for a faster accrual rate which you should look into.
  • Kynthia
    Kynthia Posts: 5,666 Forumite
    First Post First Anniversary Combo Breaker
    The banding showing a higher percentage contribution rate for each higher salary group don't lead you to getting any more into your pension. I believe they are there to assist the lower paid to pay less towards their pension, but your contributions are not going into a pot in your name.

    As the poster above says, if you want to increase your pension then 'additional pension', AVCs or other methods on their website are the way to go.
    Don't listen to me, I'm no expert!
  • treadstone66
    treadstone66 Posts: 21 Forumite
    Many thanks, I will go back to HR now as something seems amiss with what my maximum contribution should be. My concern being that if that has been calculated wrong, my employers contribution could also be wrong (?!). I can post back to this thread with a follow up, otherwise my op question has been answered, thanks to all !!!128077; !!!128077;
  • zolablue25
    zolablue25 Posts: 1,652 Forumite
    As far as I understand a DB scheme such as yours, there is no employer's contribution as such. They just need to ensure that they can afford to pay everyone that is entitled to receive the pension. How that is done is down to the individual employer. Of course, as yours is a teacher's pension, your employer doesn't need to worry about that as the tax payer will stump up for it.
  • PeacefulWaters
    PeacefulWaters Posts: 8,495 Forumite
    zolablue25 wrote: »
    As far as I understand a DB scheme such as yours, there is no employer's contribution as such. They just need to ensure that they can afford to pay everyone that is entitled to receive the pension. How that is done is down to the individual employer. Of course, as yours is a teacher's pension, your employer doesn't need to worry about that as the tax payer will stump up for it.

    The scheme is funded by both employer and employee.
  • xylophone
    xylophone Posts: 44,331 Forumite
    Name Dropper First Anniversary First Post
    As far as I understand a DB scheme such as yours, there is no employer's contribution as such.

    Not so.


    http://www.uhy-uk.com/sectors/academy-schools/academy-schools-blog/rises-in-teachers-pension-scheme-predicted/
  • Asghar
    Asghar Posts: 433 Forumite
    Name Dropper First Post First Anniversary
    treadstone66 wrote: »
    Many thanks, I will go back to HR now as something seems amiss with what my maximum contribution should be. My concern being that if that has been calculated wrong, my employers contribution could also be wrong (?!).

    It seems that you did not fully understand the replies.

    You shouldn't worry about the maximum amount, just pay the minimum, which should be a set percentage according your salary scale and ignore any employer contributions shown on your payslip. These figures are not building up a pot of pension money in your name.

    Do not confuse it with other Workplace pensions. You are in a Government Defined Benefit scheme, what you get when you retire will probably be based on your average yearly salary and how long you have worked there. Not how much you and your employer are paying. That money is used to fund the pension scheme today and help to pay already retired teachers their pension.
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