Pension contribution rises 2013/14
From 1 April 2013, the second stage of pension contribution increases imposed by Government is implemented. This is part of the the 3.2% average increase in contributions running from 2013 to 2015.
Pension scheme contributions receive tax relief so your net pension contribution rise over the year will be less than the gross contribution rise. For example if you have pensionable earnings of £30,00pa and pay a gross contribution of 9% your net contribution following tax relief would be 7.2%.
The average level of contribution rise in 2013/14 is approximately 1.2%.
The average contribution rise in 2014/15 will be expected to be 0.8%.
Until 2015 all scheme members are building up defined benefit final salary benefits. After 2015 some scheme members will move to a defined benefit career average pension system for future pension benefits (accrual). Other scheme members may be covered by the proposed protection arrangements that will retain their membership of a final salary scheme while others will move to a CARE arrangement but not until some point after 2015.
Your employers contribution to the scheme is 14% of your pensionable pay.
You should not make any decisions about your pension scheme membership without taking independent financial advice.
The increases in 2013/14 are as below:
|
Full time equivalent pensionable pay |
2012/13 contribution rate (gross before tax relief) |
2013/14 contribution rate (gross before tax relief) |
Contribution rate increase (gross before tax relief) in 2013/14 |
|
Up to £15,278 |
5% |
5% |
0 |
|
£15,279 to £21,175 |
5% |
5.3% |
0.3 |
|
£21,176 to £26,557 |
6.5% |
6.8% |
0.3 |
|
£26,558 to £48,982 |
8% |
9% |
1.0 |
|
£48,983 to £69,931 |
8.9% |
11.3% |
2.4 |
|
£69,932 to £110,273 |
9.9% |
12.3% |
2.4 |
|
Over £110,273 |
10.9% |
13.3% |
2.4 |