I have a client who earns approx £100k and is in a stakeholder pension , his employer monthly contributions have just risen to about £250 a month and his £130;. this seems low consider considering the autoenrol de minimis , any advice on what to do gratefully received.
Nick
Replies (7)
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Don't forget there is a ceiling on earnings on which (auto-enrolment) contributions must be paid.
As Paul says maximum (assuming normal arrangements) is currently:-
Employer (gross) £109.65
Employee (net) £146.20
The figures I've quoted are not really a maximum / ceiling. It's more of a minimum once you are above a certain salary level.
The AE rules only set a mandatory floor, not a mandatory ceiling. The only ceiling, if you look at it that way, is the annual allowance of £40,000. Given the insignificance of the state pension to someone who has been earning £100k, the client ought probably to be looking at paying much more into the private pension, irrespective of the AE rules, and doing so by employer contribution increases, so that the NI cost is not raised unnecessarily.
As I understand it, we have a statutory obligation to Auto enroll eligible employees - but they can subsequently opt out or pay any rates they choose - so long as the employer is in agreement of course. (And subject to HMRC limits)