workplace pensions scheme

[smokeybandit]

Does anyone know if there is any wriggle room in what your contribution has to be? I've seen that minimum for employee is 0.8% and mine is calculated on my gross pay, but it's 4% (my employer pays 3%) and while I understand it's a good idea it's a chunk of around £55 a month that I could really do with being a bit less at the moment.

It all depends on which definition of 'basic salary' your employer has chosen ( there are 5) and how they have set up the contributions. Every workplace scheme is different.

It may be a little lower if calculated on Qualifying Earnings rather than total gross salary but they may already be doing that, or doing one of the other ways of determining on what salary the pension contribution applies.

It will depend on the rules of the scheme you are in. All are different.

Pension contributions depend entirely on the type of pension scheme you're in.

There are 2 main types:

defined contribution - a pension pot based on how much is paid in
defined benefit - a pension pot based on your salary and how long you’ve worked for your employer

Defined contribution is more flexible from a contribution perspective. They are lower in value to the saver than a defined benefit pension and far less financial risk for the company (which is why most companies now offer only this type of pension). Effectively your pension pot is only as big as you want to make it.

Defined benefit means a pension promise that your employer has made to you for your retirement where you both contribute to the fund (although their contribution is generally larger) and you get a defined amount of money out at the end. These are famous for massive shortfalls (BHS to name a recent one) and your contribution cannot be reduced, only cancelled and closed to future contributions.

If you have a defined contribution pension then speak to HR about what scope you may have for reducing payments. If you're on a defined benefit scheme hold onto it for everything it's worth because they are like gold dust.

Because of auto enrolment there are minimum contributions.
I think the current is 1% employee and 1% employer which is going to rise in the next few years to 5% employee and 3% employer

Have a look here
www.thepensionsregulator.gov.uk/individuals.aspx
but as I understand it if they do qualifying earnings you get £500 ish a month that doesn't come into those percentages -but there is a down side to that somewhere (you might have to include something that you don't otherwise) I can't remember exactly what it was...
After looking at the pension regulator I would have a chat with your employer...
(Auto enrolment is a nightmare for me - I pay the wages for a small business, part time staff - we have one member of staff who earns enough to just qualify for 3 months a year and we have to start next year...more hassle/red tape...for piddly amounts...)

Unlucky those are the minimums required under automatic enrolment legislation but the actual amount payable will depend on the scheme rules. As quasibex said, if the OP is in a defined benefit scheme the contributions will be higher.

*smokey the OP said the minimum would be 0.8% -but I don't think that can be the case now?
Currently she is paying 1% and her employer 3% -I don't think she can pay any less than that now?

The OP said she is paying 4%. Whether she can pay any less than that will depend on her scheme's rules.

Ok I'm reading it as a total of 4% - so 1% her and 3% employer - but if she is paying 4% she should be able to pay less ...for now
but it is going up to 5% in the next few years...so I kind of think you might as well get used to it - unless you are likely to be promoted/get a pay increase...

As others have said it will depend on your scheme. There will be a pensions team you can ask

The employer could still be paying 0.8% as the remaining 0.2% is technically credited by the Government via tax relief. (I'd normally expect the contribution to be expressed that way if it is a group personal pension scheme i.e. contract-based rather than an occupational scheme I.e. trust-based).
Whether the OP can pay less than the minimum employer contribution is down to the rules of the scheme - but membership is not mandatory and employees can opt out altogether if they so wish.