Is this legal - higher paid job but pay increase not pensionable?

[Mydogiscalledsam]

I wasn’t sure whether this should go in money matters or work - happy to ask for it to be moved if it’s the wrong place.

I applied for a job, with higher pay, with the company I work for. The job was advertised as a permanent position. I went through the interview process and then waited, as you do.

I then receive a letter from HR, via my line manager, saying I have been successful in my application but they are only giving it to me as someone “acting up” the role. My basic salary will stay the same as it it now, none of my terms and conditions will change, and they are only going to pay me the extra £X per month for 3 months which will be non-pensionable. After 3 months they are going to review and then decide whether to make it a permanent position. The letter goes on to explain how this is something they are doing across the business while they review the business financial stability.

I’m really unsure whether they are even allowed to do this? Are they trying to cut pension costs on the quiet? Am I allowed to question/challenge this?

Basically they are trying to do it as a probation it sounds like. 3 months of loss of pension doesn't sound terrible for the prospect of permanently securing the position. Personally id just go for it

I think it was fairly common in the public sector years ago for pay increases to be non pensionable.

That might have been for good reason in the days of final salary rather than career average pensions?

So despite it being advertised as permanent, it might not be. Yeah I wouldn’t accept on those terms. I suspect giving you a temporary responsibility allowance which isn’t pensionable is legal, but certainly not somewhere I’d want to work for. If an external applicant had been successful they wouldn’t have done that - you already work there so you’re a surer bet, but being treated worse. Decline and look elsewhere.

I have neither a final salary or an average salary pension. I’m not quite sure what it’s called off the top of my head, but it’s one of those where you pay the money in a bit pot and at the end you might get back more, or maybe less, than you put in it.

This is also what I was thinking re if it was an external applicant.
Something doesn’t seem right to me. Especially as I feel as if I’ve been doing the job for the past 6-12 months without the extra pay anyways on top of my regular job because the company had a recruitment freeze and they couldn’t advertise the job after someone left but the work needed doing. Grrrrrr…..
I do actually like my job, but I feel the company is doing some strange things at the minute which I’m not a big fan of.

Yes they can do those. Not much you can do about it except ask exactly what it is that you aren’t currently doing that they want to test in this trial period and then argue about it. Or find another job.

Yes, they're paying the rise as an 'allowance' rather than salary, and allowances can be non-pensionable.
Quite common in public sector, Universities, that sort of thing, known as Acting Up or Responsibility allowances.
Normal and legal, not ideal for the candidate by any means but people often take them as a route to getting some good experience leading to a perm increase.

Then go back to them ans say you've effectively been acting up these past 6 months.
Tell them you'd like to understand what will be evaluated in this next 3 month period and what would be the possibility of the job not being made permanent.

Employers can, and usually do, postpone auto-enrolment for new starters as not everyone makes it through probation.

However, you do have a right to ask for immediate enrolment.

I’ve had a think over the past few days. I’ve also had a chat with my line manager. This seems to be a company wide thing they are doing at the minute. I’ve also heard several others in the company having a query about the same thing.

I have decided I will take it for the time being, it would be stilly to turn down extra cash for a few months, and plan to go from there. If nothing comes of it I.e. it doesn’t get made permanent then I will be having a look for something else in the new year.