If you stop saving then your employer will also stop and you will no longer benefit from government tax relief . Find out more about this and other considerations below.  
Whilst you are a member of a workplace pension arrangement meeting the minimum statutory requirements:- 
 
• You are building up a savings pot for your retirement. 
• You are saving from your net pay ( 5% of Band Earnings less tax relief) 
• The government is adding a payment in respect of tax relief (20% of your contribution) 
• The company is also paying into your pot. (3% of Band Earnings) 
 
Band Earnings for 2019/2020 are total earnings between £6,136 per annum and £50,000 per annum. 
For example, if you were an employee with gross earnings of £16,136 a year, £ 1,345 per month, your Band earnings would be £10,000 a year, £833 per month. 
The payments into your retirement savings pot would be £66.64 per month made up as follows: 
Paid by the Company £24.99 
Paid by Government £8.33 
Saved by you from your net pay £33.32 
Total £66.64 
Full details of the calculation of these illustrative amounts are given below. 
For each £1 that you save then the total amount saved for you in your retirement savings pot is £2. 
A contribution of £66.64 each month builds up to £799.68 over the course of a year and to £7,996.80 over 10 years making no allowance for any interest or investment return. 
If you were to opt out of the scheme then you would stop saving into your retirement savings pot but so would the company and the government. 
Again assuming your gross earnings were £16,136 a year then your net take home pay would increase by £33.32 a month but you would lose a payment of £66.64 into your retirement savings pot. 
Please note that 
• Once you stop saving into the workplace pension arrangement then both the employer and government contributions will also stop. 
• The savings already paid to your retirement savings pot will be held by your workplace pension provider for you until you wish to use them to provide retirement benefits at age 55 or later. 
• You may ask to restart your contributions at any time but you can only do this once in any 12 month period. 
• If you do restart your contributions then the employer and government contributions will also restart subject to confirmation of eligibility. 
• Any period during which no contributions are being paid is likely to significantly impact on the amount of your retirement savings pot at retirement. 
• The employer may be required by law to reenrol you into the workplace pension arrangement every three years if you are aged between 22 and state pension age and earn more than £10,000 per annum. 
• Your retirement savings pot belongs to you and is held by your workplace pension provider on your behalf. 
• You will be able to use the savings in your pot to provide benefits for you on retirement at age 55 or later. 
• If you leave the company, the payments already made will be held by your workplace pension provider in your pot for you and you can make separate arrangements with that provider to continue your own contributions if you wish. Your new employer will enrol you into a new scheme subject to eligibility. 
 
Details of the calculation of the illustrative figures quoted above 
Gross Earnings assumed to be £16,136 per annum paid monthly for the purpose of the illustration. 
Gross earnings each month £ 1345 
Band Earnings each month 1345 – 512 = 833 
We would pay £24.99 each month into your retirement savings pot 
3% of £833 = £24.99 
You would pay £33.32 each month into your retirement savings pot 
5% of £833 = £41.65 
Less tax relief 
20% of £41.65 = £8.33 
Net contribution deducted from your net pay £41.65 - £8.33 = £33.32 
AVIVA would reclaim the tax relief of £8.33 each month from the government. 
The total amount paid to your retirement savings pot each month would be 
£66.64 made up as follows: - 
Employer £24.99 
You £33.32 
Tax Relief £8.33 
 
If you have any questions on this or any other pension or retirement savings matter then please contact Elaine Tarver on 0771 275 1336 or elaine.tarver@millpensions.co.uk for a free no obligation half hour chat.  
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