There are no restrictions on the number of changes.  You can increase, freeze, or decrease your contributions at any time.

Remember – it should be your choice to pay below the minimum levels. Your employer is legally not allowed to suggest, encourage or induce you to do so.

Reducing your pension contributions means:

• your contribution could be reduced, but only if you decide this is what you want.
• you’ll no longer be classed as ‘eligible’ for auto-enrolment, so the amount you’d like to pay should be discussed with your employer.
• your employer would no longer have a legal obligation to pay anything into your pension pot. So you risk losing ‘free’ money from them.
• your employer may need to re-enrol you into the pension scheme every 3 years (sometimes sooner). You’ll have the opportunity again to see if you’d like to contribute to meet the total legal minimum contributions.
• you’ll still receive tax relief from the government (if you’re entitled to).

While it’s your decision to pay below the minimum legal contribution levels, your employer may not be able to facilitate this through their payroll.  Speak to your employer first to see if they can help with this.

If your employer can’t help you reduce your contributions

Then you could instead choose to make payments directly into your pension pot by Direct Debit. Visit our website for more information on how to set this up.

Important

Your pension savings are separate from the State Pension. This is currently at £230.25 a week, so it’s likely you’ll need to top it up to enjoy a comfortable retirement.

You can decide to opt back into the pension scheme and pay towards the legal total minimum contributions at any point in the future. You won’t need to wait until you’re re-enrolled by your employer. You’ll just need to let your employer know in writing. This can be a signed letter or email, if it includes a statement to say it has come from you.

Remember, if you reduce your own contributions your employer will no longer have to continue contributing to your pension pot, although they can choose to. Also, as you wouldn’t be paying in as much, you wouldn’t receive as much tax relief from the government on your contributions.

For the first 42 days, we hold your pension contributions for you but don’t invest them. This is so we can give you a refund if you opt out of the pension scheme in the first calendar month.

After this time period has passed (and providing your employer has paid in your contributions) we’ll begin to invest your money. You’ll see this reflected on your Online Account transactions page.

How does tax relief show on my Online Account?

This depends on how your employer deducts your contributions from your pay – whether before or after tax has been deducted. You can find more information on this here.

What if your pension contributions on your Online Account don’t match your payslip?

Your pension contributions will show alongside the date your employer has sent them to us. This doesn’t always match the date they deducted contributions from your pay. Many employers work in arrears, ie linked to the previous pay period rather than the current pay period – so it’s worth checking if your contributions match your payslip from the month before.

If you have any questions about what you’re paying into the scheme, your payroll department should be able to assist. As your employer is responsible for working out your contributions and sending them to us, we wouldn’t be able to adjust this for you if you feel it’s incorrect.

Check your contributions are correct

You can check what contributions you should be making under qualifying earnings by using MoneyHelper’s workplace pension contribution calculator.

If you have any questions about what you’re paying into the scheme, your payroll department should be able to assist.

If your employer is using the ‘relief at source’ tax arrangement where your contributions are deducted after tax, we’ll automatically claim tax relief for you, adding the basic tax rate of 20% to your pension contributions. We can receive this payment for tax relief from HMRC up to 12 weeks after your contributions are made into your pension pot.

If you’re a higher rate taxpayer, we can’t comment on how long it takes to receive the extra tax relief – you’ll need to contact HMRC.

The People’s Pension is not a defined benefit scheme, it’s a defined contribution pension scheme instead. This means you and/or your employer have been steadily building up your own pension pot over the course of your employment. It’s your money, invested in your name. If your employer goes bust your money is held separately and won’t be available to your employer’s creditors. So, you’ll still have the pension pot you’ve been building up. Your money will be held on your behalf by the Trustee of The People’s Pension. Visit our webpage for more about how we keep your pension savings secure.

If your employer has gone bust, you’ll no longer receive contributions from them going forward. An Insolvency Practitioner will be responsible for gathering all the information on pension payments that your employer should’ve made before the insolvency date. If you wanted to take a small pot lump sum of under £10,000, we’d need to receive all the outstanding contributions first according to HM Revenue & Customs rules.

If you have a new employer, after your previous employer went bust, you can keep paying into your pension pot with The People’s Pension and your new employer may decide to pay into this as well. You can carry on contributing even if you change jobs and your new employer doesn’t or if you become self-employed. Find out how you can make personal payments into your pension.

Regular Direct Debit payment (monthly or annual)

To make personal contributions by Direct Debit you need to:

1. Complete the ‘Making personal contributions to your pension’ form
2. Complete the Direct Debit mandate
3. Return your completed forms – we recommend you post these to us at ‘Freepost THE PEOPLES PENSION’.

We need you to return the completed ‘Making personal contributions to your pension’ form and the Direct Debit mandate to us before we can carry out our checks. We won’t be able to begin taking payments from you until we’ve completed our checks.

If we’re unable to check your identity and bank account electronically, we may need to contact you again to ask for more information. It’ll take us up to 10 working days to arrange your Direct Debit with your bank. We’ll write to you once it’s set up.

Lump sum payment through your online banking (sometimes known as BACS)

To make personal contributions through your online banking (sometimes known as BACS), you’ll need to:

1. Complete the ‘Making personal contributions to your pension’ form
2. Return your completed forms – we recommend you post these to us at ‘Freepost THE PEOPLES PENSION’.

For more information about tax relief, and the amount you can save into your pension and receive tax relief on, take a look at our other knowledge base Q&As:

• What’s tax relief?
• What’s the annual allowance?

If you make direct payments to us or your employer deducts your contributions after tax (this is known as relief at source), then we’ll automatically claim tax relief for you, adding the basic tax rate of 20% to your contributions. If you pay the Scottish starter rate of Income Tax at 19%, we’ll still give you tax relief at 20% and HMRC won’t ask you to repay the difference – so you won’t need to take any action. If you pay more than 20% tax, then you’ll need to complete a tax return to claim back the extra tax relief from HMRC.

• If your earnings are below the starting rate for income tax, you’ll receive a payment to your bank account from HM Revenue & Customs (HMRC) – this will represent the tax relief you would have benefitted from if you were a taxpayer. Find out more.
• However, if your earnings are over the starting rate for income tax, you’ll automatically get tax relief at the highest rate of tax you pay and so you don’t need to claim this back from HMRC.

For more information about tax relief, please visit our pension tax webpage.

If you can afford to, you could think about saving more. The more you pay in, the more tax relief you could get from the government and the more you could get back when you retire. You can always reduce your pension contributions back to the minimum amounts if your circumstances change.

If you want to increase your pension contributions, please talk to your employer first to see if they can set up the extra payments for you. If your employer can’t do this, then you can make personal contributions to your pension by Direct Debit or by a lump sum payment through your online banking (sometimes called BACS). Visit our webpage on workplace pension contributions for more information about making personal payments into your pension.