The minimum contribution to a workplace pension currently stands at 8%. This 8% consists of a minimum of 3% from your employer. This leaves you with the remainder of 5% to pay.
But what happens when you have been furloughed during Covid-19?
The government’s coronavirus Job Retention Scheme will cover the contribution made by your employer based on your furloughed salary. This is until 31st July and then your employer picks up the contribution as normal. You must still pay your own contribution. So, if you had to pay 5% before you were furloughed, you still pay 5% now but based on your new furloughed salary.
The downside is that, if you earn more than £2,500 pm then the 3% employer contribution on anything you earn above this, is not backed by the scheme. Your employer is not obliged to continue to pay above the auto-enrolment minimums as the rules have been relaxed during this time.
If you require advice or guidance on your pension, contact one of the team at Eldon who will be happy to help.