Employer Pension Contributions

[RememberDecember]

What is a typical decent employer pension contribution these days? I currently get 10% (maxed out as I put in 5% plus AVCs although these aren’t relevant to er contribution).

I’m looking at other companies, considering moving but often they seem to be more like 6-8%. I just asked ChatGPT for UK avg and it said 3-6% which seems v low? Looking at professional roles.

3% of qualifying earnings....

I'm an employment law solicitor. I look at lot of people's employment contracts. I'd say on average clients are receiving 4-6%.

10% and pay is really good too. US company.

Mine matches up to 10%, so currently t put in 10% and they put in 10%. I could put in more, but they max out at 10%. It used to be 6%, went up to 10 a few years ago.

3% company and 75% me ( to salary sacrifice down to just above tax paying level -saving tax and ni)
company rebates their ni saved too so pension gets a 15% boost on the extra I pay in over minimum 5%.

Minimum is 3%, I raised my contributions to 6%.

This thread is eye opening! I've never worked in the public sector. Professional role, my company put in 8%.

@windandrainy why are the 28% and 21% arbitrary numbers? I don’t understand pensions at all and I find the company seems to make them very hard to understand too

I pay in 9.9% and employer contribution is 26.86%. Teacher.

I pay 6%, employer (private, large corporate) pays 19% to make it a 25% contribution in total.

But I also am buying extra pension (avc) due to leaving TPS (couldn’t afford to pay in) for quite a few years…. Regretting that now but needed the money then for childcare etc

Because the amount paid in to a Defined Benefit pension is irrelevant. You don't have a pot of money, you have a promise to pay e.g. £1000 a year in retirement. It doesn't matter if the employer pays 1% or 100%, you still get £1000 a year.

If you're earning enough for £50k of contributions you really need to be much more clued up than needing to ask irrelevant questions to chatgpt

What is it irrelevant @Shr3dding ?
mum trying to understand what are typical employer contributions, ChatGPT said 3-6% which I thought seemed low, but posters here have kindly confirmed that seems right. I thought 8-10% was more common, but the consensus is that 10% seems high.

I haven’t been in the external jobs market for years, but it implies I may need to factor in a 5% uplift in salary to equate with current salary. I will do similar with bonus, although they are much more variable and often highly discretionary.

That’s correct. You need to consider the whole package rather than being solely fixated on employer pension %.

When I started my current role my employer stated 7% employer contributions were standard across the business. I asked if it was negotiable and they said they couldn’t change it but instead they gave me a 14k car allowance to bulk up the package. The role is 100% WFH.

Previous employer paid in 4%, current employer pays in 12.5%. That and the 50% uplift in salary were among the reasons why I left my previous employer.

Previous employer was low paying in a low pay industry. I didn't realise how low until my current role dropped into my lap.

That is a hefty car allowance @Sienna61 !
I was also wondering if car allowances were still a thing, they don’t seem widely advertised Again, I have in current role so need to factor in.

With this kind of arrangement, your after salary sacrifice pay must meet NMW. But your employer should be well aware of that. Taking your pay down to £12,570 to avoid tax & ni would be ok if your hours were about 19/20 a week.

13.5% employer .

I get 4% at a highly regarded, reasonably well paying, large professional services firm. I got 8% matched at my previous, smaller firm.

I've been looking round lately. CS wages aren't that bad, the pension is excellent (compared to my current employer), the leave allowance is great and by all accounts, flexible working is a given.

Unsurprisingly CS jobs are something that are always suggested for people looking for admin jobs.

I'm both late and new to this pension malarkey and desperately trying to catch up in the few years before I retire 😬 Would appreciate help with calculations!

I earn £55k. If I salary sacrifice £15k how much will go into my pension? Will I get 40% relief on £5k and 20% on £10k?

What about my NIC contributions and my employers?

We also have double matching up to 5% employee with 10% employer contributions.
Large professional services firm.
My husband works at an IFA and says its very good - feel a bit trapped by it tbh when consider other jobs

In my experience car allowances are still quite prevalent. What has fallen off a cliff is the use of company cars as the tax position for those is now awful for both employer and employee compared with car allowances.

The other advantage of car allowances is that they are discretionary in value and not in any way linked to any vehicle you may purchase. That means you can negotiate them as effectively an additional cash perk.

That's exactly what I was thinking
Nmw is a massive pain in the arse when it comes to salary sacrificed benefits

With a car allowance, bonus etc you need to take account of them not normally being pensionable or bonus relevant (if bonus is a percentage of salary).

Also, a car allowance may stick at a certain cash amount. I was with my previous employer for 8 years and in that time the cash amount of the car allowance didnt increase.

Watch out for restrictions around a car allowance. Mine required that my car was not more than 5 years old. When I left, I was close to the point where the car allowance was no longer worth having.