15 Apr What happens to my pension contributions on Furlough?
Many Employees over the next few weeks and months will find themselves Furloughed.
Over the last few weeks employees and employers have been asking Rebbeca Hammonds at Willow Financial Solutions the question ‘What happens to my pension contributions on Furlough?’
The answer is ‘Nothing’.
Your pensions contributions will still be deducted from your pay.
The deduction is calculated on the 80% figure unless the employer is making up the additional 20%. If this is the case the pension is calculated on the full amount.
In essence, the contribution is calculated on the gross pensionable earnings whatever that salary may be 80% of salary up to a maximum of £2,500 or 100% of salary.
However, some employees will be struggling with the reduction in earnings to 80% of their salary.
They are well within their rights to take a payment holiday from their pension contributions.
This will need to be put in writing to the employer for them to then advise the payroll not to make any deductions. The contributions can then resume as normal once they are back on full pay. This is not ‘opting out’.
For more pension advice speak to Team Stone Ladies advocate and Independent Financial Adviser Rebecca Hammonds on 01782 331158 or email [email protected]. Alternatively, visit her website for more pension information.