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New Pension contributions Query.

Discussion in 'Pay and conditions' started by benpaulbaker, Feb 27, 2012.

  1. benpaulbaker

    benpaulbaker New commenter

    First of all, apologies if this is a repeat topic but I could not see one similar when I looked.
    Having just checked where i fit into the new pension contributions on the site linked below,
    http://www.teacherspensions.co.uk/members/members_reforms.htm
    I have to say that I am still a little confused. I understand that the percentage contribution is split into brackets but it appears (and I have "done the Math" as the Americans say) that it is the percentage of your total salary, unlike income tax in which you only pay the inceased rate on what you earn in that particular bracket.
    This means that if you are on UPS2 with a meagre TLR, you earn just shy of £40k and pay 7.6% contributions. When you move to UPS3 and earn slightly over £40k you will pay 8.0% on your total salary.
    In the extremest of cases...
    So, £39999 x 7.6% = £3039.92 = £253.32 per month
    or, £40001 x 8.0% = £3200.08 = £266.67 per month
    Giving a pay cut of £160 per year for nothing!
    I will be in a similar situation the next time my pay increases, albeit not as severe!
    I am quite sure that I have understood the site but it doesn't appear to be a fair system (why start now?), especially looking at the above example.
    Anybody else have any more information?
    Thanks,

    Ben
     
  2. benpaulbaker

    benpaulbaker New commenter

    ...and by "extremest", I meant "extremist"!
    ...and by "extremist", I meant "most extreme"!!!
    Sorry.
     

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