[ˈwɜːkˌpleɪs ˈpɛnʃᵊn]
A WorkPlace Pension is a method of saving for retirement arranged by employers for employees. There are tax benefits associated with this scheme.
A Workplace Pension is a retirement savings plan in the United Kingdom that is set up by an employer for their Employees. The employer automatically deducts a percentage of the Employee's pay before tax, therefore lowering the amount of Taxable Income an employee has and reducing their tax bill.
Employers are legally required to Automatically Enrol eligible workers into a Workplace Pension scheme and make contributions towards it. However, individuals can opt-out and receive a full refund.
Employees can also top up their Workplace Pension with regular payments or a one-off lump sum. The employee will receive a basic rate tax relief on these contributions. Usually, pension providers automatically claim this tax relief and add it to the pension pot. Higher and Additional rate tax payers can claim extra tax relief on these contributions. This must be done via a Self Assessment.
The Pension Annual Allowance is the total amount of money that can be paid into all Pensions per year before a tax charge applies. It is £60,000 for the 2023/24 Tax Year
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