I want to increase my pension contributions – can my employer stop me? ...Middle East

Question: I want to increase my pension contributions but my employer has said they can’t do it? Is this against the rules – and do they have to let me increase my own contributions if I want to? What can I do to boost the amount I’m paying in?

Those aged 22 to 66 and earning more than £10,000 per year qualify for auto-enrolment, although those outside these parameters can “opt-in” to their workplace pension scheme. Firms are required to contribute at least 3 per cent of “qualifying earnings”, with employees paying in 4 per cent and 1 per cent coming via pension tax relief.

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Your workplace pension scheme also has to offer a “default” investment charging a maximum of 0.75 per cent which your contributions will be invested in if you do nothing. Some schemes will offer you a choice of different investments, although they are under no obligation to do this.

You should usually be free to increase personal contributions to your scheme even if your employer doesn’t “match” these and I’d be extremely surprised if any provider was unwilling to let you do this. It may be that your employer believed you were asking about them increasing their contributions rather than you increasing your own, so as a starting point I’d double check with them. If they refuse to budge, speak to the scheme receiving your money – which will be separate from your employer – to see if there are alternative ways to top-up your monthly contributions.

Many also offer a range of investment options to suit your needs, although these will not be subject to a charge cap in the same way as an auto-enrolment default fund. If you opt for this route, it’s important to consider the overall value-for-money of your chosen provider, including the charges they levy.

In addition, you can only make personal contributions up to 100 per cent of your UK relevant earnings in the tax year they are made. Relevant earnings include things like salary, bonuses and commission. For example, someone with £30,000 of UK relevant earnings could pay £24,000 personal contributions to a pension, and receive £6,000 tax relief paid into the scheme.

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