Moving to Nest = lower contributions

Salote · 18 May 2018 at 11:51PM

I have been paying into a company contributory stakeholder pension from 2010. The minimum payment was £30 which I paid and my employer matched so therefore £67.50 paid in every month incl tax relief. Company has now stopped this pension to enrole everyone into NEST as of April 2017 and have just received my annual statement stating my employer contributions are £22 per year as per the minimum Nest percentages. Is this correct procedure? Can they deduct contributions to enrol to NEST?

Brynsam · 18 May 2018 at 11:57PM

£22 per year?

Yes, auto enrolment means employers can deduct employee contributions from pay (although the employee can always choose to opt out - but you'd lose the employer contribution if you do that).

Employer and employee minimum contributions increased from 6.4.18 (2% and 3% respectively) and will increase again on 6.4.19 (3% and 5% respectively).

Salote · 19 May 2018 at 12:02AM

Sorry I haven't worded correctly.
I was getting an employer contribution of £30 per month with the stakeholder pension and now only £22 per year contribution with Nest so am disadvantaged with a lower employer contribution now the company have stopped stakeholder contribution to enrole with Nest.

Brynsam · 19 May 2018 at 12:11AM

Unless you have a contractual entitlement to £360 a year from your employer, they are only required to pay contributions in line with auto enrolment regulations. Depending on your earnings, this could indeed be lower. Check with your employer whether this was really their intention (mistakes do happen!).

What deductions have been made from your pay for the last tax year?

Salote · 19 May 2018 at 12:32AM

My contribution was £18.04. I was on maternity leave for the year so my contributions and my employer contributions are based on my maternity pay which I have asked my employer about as employer contributions should be based on my notional pay so my employer said they will check this. The pay I got for maternity which is the government minimum is about half of my normal salary. So it wont be until next year when I will get £315 employer contribution which is closer to the £360.
No I have no contract. It was only in the job description that I would get a salary and contributory pension and it doesn't stipulate any amount.

Moving to Nest = lower contributions

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