Do you remember that you were automatically enrolled in your employers’ workplace pension scheme some time ago? Well, the payments which are made into this scheme are increasing this month, so you’ll see a change in your payslip, but it’s not all bad news.
Up until this month, the contributions into your workplace pension was at least 2% from your employer and you paid 3%. On April 6th 2019 these rates increased, so this month will be the first pay packet monthly paid, employees will see showing the increased contribution amounts of 3% from your employer and 5% of your pay.
I know this is another deduction from your pay but remember it’s your money that’s being saved for your retirement, and you’ll be glad you did. When you take the tax break you receive into account, you’ll only pay 4%, the other 1% is tax relief from HMRC. This means you double your money to 8% with your employer’s payment and the tax relief. Trust me on this, it’s a fantastic deal, one I urge you to keep going.
As an additional sweetener, the amount of money you can earn tax-free, known as your personal allowance, also increases this month by £650 to £12,500, so you can now earn £1041 each month before you begin to pay income tax.