How much does it cost?
When you join PACE you will start to build up a pension by making contributions from your pay. The amount you will pay is 6% of your Pensionable Earnings.
For example, based on weekly pay of £250, the cost to you per week will be as follows:
6% of £250 = £15
However, the actual cost to you will be less, because of the effect of tax relief and reduced National Insurance contributions for Members.
What about tax relief?
You will also benefit from tax relief as your contributions are deducted from your pay before income tax is calculated.
For example, a £15 contribution to PACE only reduces your take home pay by £12 for a basic rate income tax payer (based on 20% income tax rate).
Higher rate tax payers receive tax relief at their higher rate.
What about my National Insurance Contributions?
You will also pay reduced National Insurance contributions while you are a Member because PACE is a contracted out scheme.
Please note, income tax rates and National Insurance contribution rates are changed by the Government from time to time.
The position on payment of contributions, as described above, will be different if you currently participate in a salary sacrifice arrangement run by your Employer.
