How much does it cost?

How much it costs you depends on how much you are paid, but it will be between 5.5% and 12.5% of your pay.

Your rate will depend on which pay band you fall into.

The real cost to you will be less because you do not pay tax on the amount you pay into your pension. You may also pay a lower rate of National Insurance.

If you work part time or term time you will only pay contributions on your actual pay.

Example

Alex works full time and his pay is £20,000 a year, this puts him in band 2 so he will pay 5.8% of £20,000.

This works out at £96 a month, but the real cost to him will be £77 after accounting for tax relief savings.

If he worked part time (half the hours) he would only pay 5.5% but only on his £10,000 pay.

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