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Contribution rates

How much your pension costs depends upon how much you are paid. Contributions are deducted on the pay that you actually earn.

Pension contribution pay bands from 1 April 2020

BandIf your actual pay isYou pay a contribution rate of50/50 section contribution rate
1Up to £14,6005.5%2.75%
2£14,601 to £22,8005.8%2.9%
3£22,801 to £37,1006.5%3.25%
4£37,101 to £46,9006.8%3.4%
5£46,901 to £65,6008.5%4.25%
6£65,601 to £93,0009.9%4.95%
7£93,001 to £109,50010.5%5.25%
8£109,501 to £164,20011.4%5.7%
9£164,201 or more12.5%6.25%

In many cases, the real cost is a lot less than the amount shown on your payslip. This is because your contributions are taken out before you pay tax, therefore you receive tax relief.

Your employer will also make a contribution towards your pension.

The cost to your employer goes up or down. This is set by a professional expert called an actuary and is based on ensuring the fund can cover the cost of benefits it will have to pay out.

Note that even if your employer’s contribution goes up or down, your own contribution percentage will stay the same.

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