'You still need to be paid at least minimum wage'
Joanne Padilla, Which? Money expert, says...Many of us aren't contributing nearly enough to our pensions, so your intention to add more is to be applauded.
You’re correct in thinking that you can pay in the equivalent of 100% of your annual earnings into your pension each tax year ( as long as it doesn’t exceed £60,000).
But, employers are legally required to pay you at least minimum wage (£12.21 an hour for an adult aged 21 or over) after factoring in your pension contributions.
In your case, paying 12% of your income into your pension would take your remaining earnings below the minimum wage threshold, so your employer can’t accept your request.
There are other ways to boost your retirement pot. For example, your scheme may allow you to pay in a lump sum from savings, or you could set up a separate pension and pay any income you don’t need into this.
Remember the annual allowance for pension contributions applies across all your private pensions (not per pot) and it includes contributions made by you, your employer and anyone else, plus tax relief.
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