For those teachers working outside the state sector auto-enrolment is a genuine concern. Tutors working for alternative education providers, teachers in the private sector, and many others, will be expected to contribute to a pension for retirement.
This auto-enrolment is good news for workers, as it requires your company to contribute to your pension too. Many more people stayed in the workplace pension and resisted opting out because they did not notice the payments going out of their salary. Amber Rudd, the Work and Pensions Secretary called it an “extraordinary success story.”
On April 6th the percentage amount deducted for this pension was increased from 3% to 5% for employees. Employers are also expected to pay more, with an increase from 2% to 3%. This may seem like a steep increase. However, the good news is that this marks the final step in the introduction of auto-enrolment workplace pensions. This means there are no further plans for increases in contributions. This may change with future policy decision and policy revisions.
You should seek advice before opting out of workplace pensions. Pension schemes usually forms the basis of most people’s retirement plans. The employer contributions work to enhance the payout you can expect in retirement. Paying a little each month before you even knew you had earned it could provide you with the security needed for old age.
The content in this article was correct on 25th April 2019. You should not rely on this article to make important financial decisions. Teachers Financial Planning offers advice on pension plans. Please use the contact form below to arrange an informal chat with an advisor and see how we can help you.