Contributions

How much are your pension contributions?

When you are enrolled into the scheme, Trafalgar will start to deduct the legal minimum contributions from your gross pay, equal to 9.0% of your “BasicEarnings”.
Contributions will be treated as employer contributions, in order to maximise tax and National Insurance savings.

What does this mean in practice?

The maximum qualifying earnings bands are currently:

– £847 per week
– £3,669 per month

Therefore, the maximum “normal” pension contributions within the scheme are:

– £67.76 per week (split as £42.35 employee and £25.41 employer)
– £293.52 per month (split as £183.45 employee and £110.07 employer)

Can you pay more than this?

Yes – you may pay additional contributions to the scheme, subject to the Annual Allowance. This is an overall limit that applies to all pensions that you pay into; and includes both personal and employer contributions.

Any additional payments are shown separately on your payslips as “salary exchange” deductions. They are classed as employer contributions, which maximises your tax and National Insurance savings.
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If you do wish to pay higher contributions this needs to be arranged via payroll – please contact Trafalgar in the first instance.

Please note:

– when paying contributions via salary exchange, your remaining income must not fall below the National Living Wage
– salary exchange can affect some salary-related state benefits, such as Statutory Maternity Pay or Statutory Sick Pay

Remember – the more money that is paid into your pension, then the greater the benefits will be at retirement. You may wish to take advice with regard to appropriate contribution rates, so that the scheme may ultimately provide you with an income in retirement that will meet your expectations.

Timing of contributions

All contributions deducted in each tax month are sent for investment on or around the 19th of the following tax month. For example, contributions deducted between 6th April and 5th May are sent by the 19th May. Legally, they must be received by the pension provider by the 22nd of the month.

Payments are then reconciled and allocated to the individual member accounts. Your contributions will normally therefore show in your online account around the 21st of the month. This is perfectly normal practice and most employers work to these timescales.

If you are paid weekly, Trafalgar will collect and retain your contributions throughout the month and then send them as one amount, covering the whole period. Again, this is normal practice.


Initial contributions, after being enrolled

When you are first enrolled, you may find that this timing is longer for the initial contributions. This is due to your statutory right to opt-out of the scheme – payment will only be sent once your opt-out window has ended. This will settle down after the initial period, and ongoing contributions will be processed within the normal cycle.