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The cost to you

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Like most pension schemes you do have to pay towards your benefits, but you are not on your own, your employer pays too. The cost to you is set by your pensionable pay.

Simply take your pensionable pay, and see which band it falls into. This will show you the cost to you, as a percentage of that pay.

Table of pay bands

Lower tax

If you earn enough to pay tax then this will be lower. So if you are a standard rate tax payer, every £1 you pay into your pension only costs you 80p after this tax relief. And if you are a higher rate tax payer, you get tax relief at that higher rate.

Part timers

If you are part time, it is your actual part time pay which decides the pay band you fall into.

Changing pay bands

Remember, if your pay alters, this could mean you move into a different pay band. The bands will normally go up every three years, to avoid people changing bands too often just through ordinary pay rises.

More about the cost to your employer

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