Minimum Contribution Levels
If your company already offers a Defined Contribution (DC), Personal Pension, Money Purchase, SIPP or Stakeholder Plan there must be a minimum contribution level which depends on the scheme definition of pensionable salary, but will be at least 8% of qualifying earnings, with the employer paying at least 3%.
If the employer chooses to pay the minimum 3%, the employee will pay 4% with a further 1% paid as tax relief by the government. The employer can pay more than the minimum 3%, leaving the employee with less to pay.
Both the employer and the employee can contribute more than the minimum 8% contribution level.
There will be a phased introduction of these minimum contribution levels.
- October 2012 to September 2016 – minimum of 2% of qualifying earnings with at least 1% from the employer
- October 2016 to September 2017 – minimum of 5% of qualifying earnings, with at least 2% from the employer
- From October 2017, minimum of 8% of qualifying earnings, with at least 3% from the employer.
Woodward Markwell is experienced at working with businesses on their pension arrangements. We can help guide you through the maze of legislation by setting up and running a qualifying pension plan for you.
We are suitably qualified and have been looking after the pension provision for many employers for over 20 years. We are experienced at setting up and running pension schemes.
To help you get a better understanding, please review our website or contact our Financial Services department on 01473 408422 or ifa@wmibl.co.uk
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