If you want to get yourself fitter you need to start gradually increasing how much exercise you do and before you know it, you're running your 10k goal without even thinking about it.
In the same way, even if you can only afford to pay a little bit more into your savings, any extra contributions you make now will help you get that bit closer to your retirement goals.
How much you pay into your retirement savings has a direct impact on how much you’re likely to have when you come to need it. So it’s important to keep reviewing it, checking your annual benefit statement (which you can see by logging in here) and seeing if your current savings are going to get you to where you need to be.
Your annual benefit statement is your yearly summary of your pension benefits with the Plan, including things like how much retirement savings you’ve built up in the Plan and what your retirement savings are likely to be when you come to retire. You will receive this in August each year. To see your past benefit statements log in to the secure website here.
How can I find out what I currently pay in?
Your current contribution amount is shown in your letter of employment and on your annual benefit statement. This will also show how much your employer is paying in.
If you were automatically enrolled, and you haven’t chosen to join the main Plan, you will be paying in the minimum level of contributions. The minimum contribution level increases over time, to be in line with legislation. You can see the amounts below.
|When||Your employer’s contribution||Your contribution||Total into the Plan|
|6 April 2019 onwards||4%||4%||8%|
Contributions paid in through automatic enrolment are based on all your earnings (including things like bonuses) between £6,240 and £50,000 – so a maximum amount of earnings of £43,760.
This means that if you earn more than £43,760 you need to realise that the contributions made by you and your employer through Automatic Enrolment will not be based on your full earnings. If you join the main Plan instead, your contributions will be based on your full basic salary with no upper limit but not including bonuses or overtime etc).
Should I pay more in?
Generally speaking, if you can afford to contribute more, then it’s a good idea. The more you pay in now, the longer your contributions have time to grow with investment, and ultimately – the more money you’ll have when you retire.
To find out the maximum contribution your employer will pay in to the Plan please contact your HR department if you can’t find your Employment Letter.
You can also decrease your monthly contributions if your circumstances change.
When can I change how much I pay in?
If you make your contributions through Salary Exchange you can make changes to your contributions at any time throughout the year.
You can download the changing your contributions form to make your changes. You can also pay a lump sum in by using the lump sum contribution form. Any lump sum paid in will not be matched by an employer contribution.
You can also make changes to your investment choices, so it’s worth thinking about this too.
There are also annual and lifetime allowances set by the Government. The Annual Allowance specifies how much you can contribute over a tax year and still receive tax relief. The Lifetime Allowance is the total amount of pension savings you can build up without incurring a tax charge.
You can find out more about these on the Annual and Lifetime Allowance page.