Contributions

How much do I pay?

The amount you will pay towards your pension depends on your Pensionable Earnings. Your contributions will be calculated as a percentage of your Pensionable Earnings based on earnings bands (see table below) fixed on 1 April each year and will apply for a year, even if your Pensionable Earnings increase or decrease. If however you move from part-time to full-time or vice versa the percentage rate will be re-set based on your new Pensionable Earnings.

If your Pensionable Earnings reduce as a result of certain types of statutory leave (e.g. paid maternity, paternity, adoption leave) you will remain in the earnings band established at the previous 1 April however this band will be applied to the reduced Pensionable Earnings received in each pay period.

If you are planning unpaid leave, you should speak to your employer representatives about your pension contributions in the first instance.

Your contribution rates will increase on 1 April every year up to and including 1 April 2027. The Pensionable Earnings bands will also increase in line with Consumer Price Index (CPI) each year.

The table below shows how the contributions you will pay each year will change depending on your Pensionable Earnings using 2024 earnings bands (remember that the earnings bands in the first column will increase each year if there is an increase in CPI, if there is no increase in CPI the earnings bands will remain the same).

The table below reflects how the contributions might typically transition. Further information is available from your employer representative.

Earnings Bands	2024/25	2025/26	2026/27	From 2027/28
£13,944 or less	5%	5%	5%	5%
£13,945 to £54,509	5.66%	6.33%	7%	7%
£54,510 to £190,147	6%	7%	8%	9%
More than £190,147	6%	7%	8%	11%

How much will your employer pay?

Your employer will make contributions at a level agreed with the Trustee and this is expected to provide enough funds to pay the agreed level of benefits, having taken advice from the Plan Actuary and in accordance with any relevant legislation.

In addition, your employer pays for the lump sum death in service benefits under the Plan and meets all the administrative and governance costs of providing your Final Salary and CARE benefits.

Your employer will also make contributions in relation to your Shift Pay Pension Plan (SPPP) benefits (see Shift Pay Pension Plan) and will also meet the advisory costs of running the SPPP and Additional Voluntary Contributions (AVC) benefits. Note that you will pay a charge for investment and administration services for SPPP and AVC benefits which is deducted from your SPPP and/or AVC fund value. 

What earnings are pensionable?

Usually only permanent items of pay such as salary or wages and responsibility allowances are included in Pensionable Earnings. Your employer may decide that other items of your pay will be pensionable such as overtime or bonus payments and you will be notified in writing if this affects you. Shift Pay is treated differently (see Shift Pay Pension Plan).

If your salary reduces, this may be treated as if you have two distinct periods of service. This will only apply if this results in a larger pension. If your salary reduces after 1 April 2024, your Final Salary benefit can still be calculated based on your salary at 31 March 2024. You should speak to your employer about this in the first instance.

You are subject to the Earnings Cap which is a maximum amount of your earnings which can be treated as Pensionable Earnings (in the 2025/26 tax year this is £230,400) in respect of benefits earned through Pensionable Service. The Earnings Cap will be increased broadly in line with the increase in the Retail Prices Index (RPI) and be calculated in accordance with the Plan rules.

Do I get tax relief?

You pay your contributions out of your gross pay (before income tax is taken out) so the cost to you is reduced. If you pay tax at a higher rate, you save even more. The example below shows the cost of membership for a year for an employee with Pensionable Earnings of £60,000, required to contribute at 6% and who pays tax at 40%. Note that different tax rates apply in different countries within the UK.

What about National Insurance?

Both you and your employer contribute the full standard rate of National Insurance. This means that in addition to your pension from the Plan you will also receive your entitlement to Single Tier State Pension when you reach State Pension Age. Further information about State Pension Age, including a calculator to determine your State Pension Age, can be found at www.gov.uk/check-state-pension