Employer pension contributions

[Adultdcs]

Hi all,

This is a bit of a random/personal question. I would like to gain others opinions please.

Regarding the pension, I am full time employed & been with the same company for almost 10yrs.

Due to life changes/seperation etc, I have not felt in a position to personally contribute to my pension for quite a long period of time, including previous employment,

i have approx 15+ years till I reach retirement but due to the fact I I can’t afford the deduction it’s also cheaper for my employer…….

So, question is because I can’t afford the pension deduction, am I being unreasonable that the company should still pay their share given it is personal circumstances?

To answer the question, your employer is already paying 15% on anything above £5,000 towards NIC - a big increase on what the used to pay.

A lot of employers are already struggling because of this increase. To force some employers in industries that are struggling to pay towards person as well would definitely lead to, at best, redundancies/fewer jobs and at worst the closure of businesses. I'm not being overdramatic. I work with businesses and I hear how difficult things are on a daily basis. It's not always as simple as increase prices as, like you have said, many people don't have much spare cash these days.

And where would the extra money to pay the pension contributions come from? Those businesses that could would have to increase prices. So your weekly shop, your electricity etc would be more expensive, minimising any benefit to you.

'pubic' sector 😁

Haha, oops 😬

I think most employers generally pay a bit, but then match more it you contribute too. If you’ve completely opted out, then I don’t think they have to pay anything - that’s on you for opting out.

I’m sorry but you’re being really foolish. 15 years to go and you’re not putting money in to a pension? Madness. Your pension contribution is taken before your tax is deducted, so not only do you get Govt tax relief (free money - a top up from the Govt to your pension) as well as the employer contribution, but the amount you put in need only be fairly small to make a real difference.

Is it a defined benefit pension, based on length of service? Or defined contribution (a pot of money)?

You’re mad not to be making pension provision: you need to start doing so immediately and put in as much as you can.

They're referring to this:

For Employers (Auto-Enrolment)

• Minimum Contributions: 8% of qualifying earnings (e.g., £6,240 to £50,270 for 2025/26), with employer paying at least 3%, worker 5% (with tax relief), and government topping up

The obligations on your employer are set by the government. Employers were forced to contribute if you did.

You don't so they're not obliged to.

I feel naive now because I assumed the auto enrollment meant everyone had to pay in to a pension. Didn’t realise it was optional.

When these threads have come up before there is always someone who says that if your payments at this stage add up to a very small pension it’s just not worth it as pension credits will just make up any shortfall. Not sure how true that is. Maybe if you rent.

They absolutely do not. Employers are mandated to pay pension contributions, only around 10% or ppl opt out and they are re enrolled every three years.

For those saying it’s ridiculous, the suggestion has actually been put forward my a major think tank as it is unfair on those who opt out, who essentially reduce their overall pay.

unfortunately there is no mechanism for this at the moment, partly to try to encourage people to stay opted in, but now the system is embedded it might change.

More importantly though Op you should not be having to give up your contributions to survive. The reason it is set so low is so people don’t do this.

k think you should look at what support you might be entitled to, or talk to your employer about your pay. You shouldn’t be opting out now, you’re just stealing from your future self.

Are you married?

I bet you could afford it, its the choices you are making that mean you think you can't.

Do you think your company should just take your word that you can't afford to pay and therefore should still contribute their part?

Do you really think itsnan employers responsibility to pay your pension? They remunerate you for a job. You can literally choose whether or not to save some for pension.

You'd be moaning if you were forced to pat pension contributions because you can't afford them but you seem to genuinely think that someone else (employers) need to magic up extra money for you.

I'm sorry you're having a tough time, but imo you don't seem to want to help yourself. You have no children at home anymore so there's no reason you can't look for a better paid job or one with more hours or a better pension scheme.

There is no free money.

If you are young its always worth it due to compounding. My pension from my twenties has grown so much already and I am only in my 40s

Your child may need to stand on their own two feet more so that you can start to build a pension.

You would do better OP to start a thread on your budget and expenditure so posters could help you identify what you could cut to enable you to start paying into a pension.

15 years is going to be better than nothing.

You would be better paying into your pension and getting benefits if you are entitled. Also your dc would I’m sure prefer you to have a comfortable retirement

You’ve been given some good advice in this thread about how to educate yourself regarding pension provision.

I’d also advise you check your status with regard to qualifying for the full state pension at retirement age (currently 67). You can do this by going on the .gov website and following the instructions to register.

Normal employee pension contributions (not salary sacrifice) aren’t always taken before tax. A lot of autoenrolment schemes take employee contributions from net pay (post tax) and then the provider reclaims basic rate tax relief. Overall the amounts are the same but the mechanism is different.

OP YABU. Autoenrolment was brought in to encourage / force people to save for retirement. The rules are laid down by government legislation. Before autoenrolment a lot of employers didn’t offer a pension scheme at all.

If your employer did this for you they are basically setting up a completely different pension scheme arrangement for an individual employee. Why should you get this beneficial treatment and what is stop all the other employees asking for the same? It could also lead to all sorts of issues around employment law.

if you can’t afford it you can’t afford it but don’t expect your employer to treat you differently to the rest of their employees. You may not be the only one who has opted out due to affordability.

Fact is it won’t happen, whether you think it’s unfair or not as you signed up to those terms. I pay £400 a month pension, and it’s a lot for me as a single parent but I’d never consider stopping it as my employer contribution is 27% and I don’t want to struggle to survive in retirement.

Your child should be supporting themselves via the maximum loans they can take. You should be paying into your pension and therefore getting you employers contribution. I'm fairly sure any financial advisor would say the same.

If contract says matched pension contributions to 3% then thats what it means. If it meant anything else, employees could justifiably just ask employers for that extra cash.

As for auto-enrolment, the same principle applies. It's an incentive, not a right.

I was where you are now. 2 children, left DA situation, lumbered with debts. I couldn't afford net 3% of my salary into a pension either, so I lost out on 5 years of employers contributions. I felt annoyed that my ex had a 14% total contribution whilst I had nothing.

Unfortunately this is life. It's never claimed to be fair. 5 years later, the kids needed less after school support and I put that saving into a pension, along with my ER 3%.

Good luck x

As for why ER won't do it, ask yourself if you would give away money if a contract said otherwise.

Why would you expect your ER to do that?

An ER is a business and therefore they stick to legislation. If they made an exception for you, they'd have to do it for everyone. If all employees stopped paying their contributions and only expected 3% ER pension then pension planning falls to the ER and the EE is taking a back seat, something the auto-enrolment was trying to rectify.

Agree with PP who said OP is better to rely on state handouts/ pension credit in her old age, no point saving for anything other than a big pension these days as stats benefits prop up those who didn't pay in during their working life fuck me what mugs we all are

There won’t be any pension credit as the cohort that retired before 2016 dies. Pension credit eligibility is below the level of the new state pension and doesn’t include anyone who claimed their full state pension after 2016. Don’t be deceived by the myths about wealthy pensioners, that category only includes people who have paid into occupational pensions. Frankly, anyone who turns down free money in the form of tax relief and employers’ contributions is financially illiterate.

I agree Adultdcs. I work in a policy area slightly adjacent to this and we are heading for a bit of a crisis when Gen x-ers start to retire without the valuable final salary pensions many boomers had. So question is who should be saving money now to pay for Pensions (and care) we are going to need: state, employers, individuals? I think UK employers pay less than most nations towards employee pensions putting in 3% for everyone would help those in weakest position the most. Those who can contribute individually will gain more.

Pensions consultant here. There is no general answer to this. It will all depend on the specific rules of your pension scheme. I have known cases where this has been done but only because (a) the scheme's legal documentation allowed it and (b) the individual was able to make a very good case.

Opting out of your work pension should be a last resort. You really need to be paying in as soon as you can. I’ve got a relative living on state pension/credit only & stuck in a council flat. Her retirement is miserable.