More on compulsory workplace pensions
The Compulsory Workplace Pension (CWP) which the Government is introducing, is a good way of ensuring we can afford retirement…..and allowing the Government to relieve “pension pressure”.
You can opt out if you like, but you will missing out on an opportunity to help yourself. Here’s why;
– everytime you put money in your CWP, via Automatic Enrolment, it’s invested for you.
– you will get a yearly statement of your investment
Here’s how it works;
– must be over 22 years old
– earn at least £675 per month (£8,105)
– you contribute 4%, the employer contributes 3%, the government gives tax relief of 1% (all of gross salary).
E.g. Let’s say you earn £1,000 per month;
YOU contribute £40
EMPLOYER contributes £30
GOVERNMENT TAX RELIEF £10
TOTAL GOING INTO YOUR PENSION IS £80 (£40 + £30 + £10)
Some extra info….
– Your contribution will start @ 2% and will increase over the next few years. By the year 2018, you’ll be contributing 4%
– these percentages don’t apply to all your earnings, but what you earn between £5,564 to £42,475