Members of the pension scheme attract tax relief. The example below shows the amount of pension contributions an employee will pay, but it also takes into account the tax relief, so the monthly net pension contribution is lower.
Example
If an employee's actual pay is £18,000 (all of which is pensionable) their contribution rate will be 5.8% (please see the contribution table to find out your rate). This employees gross monthly pay will be £1,500.
Pensionable pay: £1,500 (per month)
Employees 5.8% contribution: £87.00 (per month)
Less
Basic rate tax relief: £17.40 (saving per month)
Employees net pension contribution: £69.60
50/50 section
The 50/50 section would reduce your pension contributions by half, see the below example based on the same employee as above for an idea of how much you would actually be saving for moving to the 50/50 section:
Pensionable pay: £1,500 (per month)
Employees 2.9% contribution: £43.50 (per month)
Less
Basic rate tax relief: £8.70 (saving per month)
Employees net pension contribution: £34.80
