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Investing · Auto-enrolment

Workplace Pension Calculator

Auto-enrolment means most UK employees have a workplace pension. The 8% minimum (3% employer + 5% employee, including tax relief) is the floor — many employers match higher.

£
%
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Total annual contribution

£2,301

Breakdown

  • Pensionable earnings
    £28,760
  • You (5%)
    £1,438
  • Employer (3%)
    £863
  • Total
    £2,301

How we calculated your result

Qualifying-earnings basis takes pay between £6,240 and £50,270. Total-salary basis applies to all earnings. Your % comes from gross pay (before tax) under most schemes — tax relief is added by HMRC or via salary sacrifice.

Official UK rules in simple English

  • Auto-enrolled at age 22+ earning £10,000+.
  • Min total contribution 8% on qualifying earnings.
  • Employer min 3%, employee min 5%.
  • You can opt out — but you lose free employer money.

Common pitfalls to watch out for

  • ⚠ Opt-out costs you tens of thousands

    On a £35k salary, the employer 3% alone is ~£860/year. Compound over 40 years = a six-figure shortfall.

  • ⚠ Net pay vs relief at source

    Net pay schemes deduct before tax (effective tax relief upfront). Relief at source claims 20% back into the pot — higher-rate taxpayers must claim the extra 20–25% via Self Assessment.

  • ⚠ Salary sacrifice is gold

    Sacrifice saves you 8% employee NI and your employer 15% — often shared back as extra contribution.

Frequently asked questions

Should I contribute more than 5%?
Almost always yes — especially if your employer matches. Match-up to the max first.
Where is it invested?
Default fund unless you choose. Check the costs — anything over 0.75% AMC is expensive.

Educational. Pensions are long-term and complex — consider regulated advice for big decisions.

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