Using a Workplace Pension Calculator
Please note this blog post was published over 12 months ago and so may not include the most up-to-date information, for example where regulation around investing has changed.
Understanding your workplace pension contributions can be made easier through a workplace pension calculator.
By using the workplace pension calculator, you can see how much your contributions are worth. Simply enter your salary, age and gender. Select whether your employer contributes based on your qualifying earnings or your full salary. This is likely to be qualifying earnings if you were auto enrolled.
On the next page, you’ll be able to enter your contribution. If you are paying the minimum, this will be 3%. If you have increased your contribution, enter your updated percentage. The minimum your employer must contribute is 2%. Click calculate your contributions.
The results page will break down your monthly contribution, and your employer’s monthly contribution, to give you the total monthly contribution. Your monthly contribution will also highlight how much tax relief was included as part of your contribution.
Above these results you can amend to see your contributions per a week or per a year. Check that these results correspond with what is on your payslip.
In addition, the Workplace Pension Calculator will also show results based on the contribution changes from April 2019 onwards. From April 6th 2019, Your minimum contribution will be 5% of earnings between £6,136 and £50,000, with your employer contributing 3%, bringing the total minimum contribution to 8%. The government will add 1% tax relief on your contribution, meaning your contribution rate actually work out as 4%, 3% from your employer and 1% from the government, bringing the total minimum contribution to 8%.
Using a Workplace Pension calculator can be useful for several reasons. Firstly, it gives you a better idea of how much impact you are making on your retirement. Take a look at your yearly result for total annual contributions – is this really going to be a sufficient amount to pay for your lifestyle in retirement? Remember, you may be retired for decades. You may want to think about increasing your contributions.
The workplace pension calculator is useful for experimenting with how different contribution rates will improve your annual contribution. Think about how much extra disposable income you could put towards retirement, and then up your contribution appropriately. You’ll be surprised at how much difference this could make, especially when you think about how continuing these investments over many years and compounding of growth will eventually build up.
You can see how your Pension could potentially grow by using the calculator on tpinvestor.com. Enter how much you invest each month, and select the period you want to invest for. This will then show you an estimated Pension value after the set amount of years and based on annual growth figures.
Pensions work by being invested in Portfolios that aim to grow your money over time. What makes a Workplace Pension so effective is the employer contribution and tax relief on top of your own contribution.
Do more with your money, use a workplace pension calculator to determine how much disposable income you could contribute towards your retirement.