Pension contributions

[Columbuscircle]

Quick and maybe oversimplified question- but is there a difference if my employer pays 8% pension contribution as opposed to me paying 4 % and them paying 4%??

Yes, them paying the 8% won’t cost you anything.

Generally employers match you upto a point though. And anything your contribute you get tax relief on too.

Are you referring to salary sacrifice op? This means you give up part of your salary and your employer pays that into your pension?

In this case you have a lower salary snd pay a little less tax and NI. The employer benefits as they pay less NI. The same 8% goes into your pension

Thanks for your replies.

To explain further, I started a new job recently and noticed on my pay slip that my employer was paying 8% pension contribution but I wasn’t paying anything, so I queried it. My employer contacted the payroll services and it has now been changed to my employer paying 4% and me, as the employee, paying 4%. It will kick in from next month so I haven’t seen a pay slip to see what will happen to my take home pay but was wondering if I am now worse off!

Yes sounds like u are worse off from your net pay in your pocket. As you are now contributing to the 8%. But overall the same amount is going into your pension.

They must have made an initial mistake of some sort.

Yes you are 4% of your salary worse off

In terms of take home pay you will be 3.2% worse off assuming you are not a higher rate tax payer - if you are then it’s only a 2.4% reduction.
You get tax relief on the contribution you make so it’s not a straight 4% reduction.

Thanks guys!