How much does it cost? 

How much it costs you depends on how much you are paid, but it will be between 5.5% and 7.5% of your pay.

Your rate will depend on which pay band you fall into.

The real cost to you will be less because you do not pay tax on the amount you pay into your pension. You may also pay a lower rate of National Insurance.

Example

Alex works full time and his pay is £20,000 a year, this puts him in band 4 so he will pay 6.5% of £20,000.

This works out at £108 a month, but the real cost will be less than £65 after tax and National Insurance savings.

If he worked part time (half the hours) he would still pay 6.5% but only on his £10,000 pay.

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