Friday, March 22nd, 2019
When you’re young and working part-time, it’s easy to put off thinking about pensions and retirement. After all, it’s not for a really long time. While that is true for many people using Catapult, down the line, you’ll still benefit from the contributions you make now.
To stop you feeling all at sea about this stuff, we’ve written a simple guide for navigating through the fog that descends when most people hear the words “pension scheme”.
What is a pension scheme?
Your pension is a little pot of gold that you’ll contribute to throughout your working life, in order to fund your retirement. A pension scheme lets you add money from your earnings and – if you meet certain criteria – your employer will also make contributions on your behalf.
If you meet the criteria, your employer will automatically enroll you in the scheme and contribute on your behalf. If don’t fit the criteria, you’re still welcome to make your own contributions.
What’s the criteria?
People are automatically enrolled into the Catapult pension scheme when they meet one or more of the following:
- You’re between 22 and 65 years of age (the state pension age)
- You earn more than £192 that week
- Have worked with Catapult for at least 3 months
Anyone can opt-out or ask to join! If you don’t meet the requirements but would love to start saving for a rainy day, you choose to contribute, however, Catapult will only make a contribution on your behalf if you earn more than £116 per week.
And how much are the contributions?
New rates will come into effect at the start of April, but until then the minimum you will contribute is 3% of your salary, which comes out of your pay. In turn, Catapult will also contribute 2% of everything you earn over £116.
There’s no limit to how much you can contribute – so if you want to put more than 3% of your pay aside, you can! Catapult’s contributions will always stay at 2%.
Can I withdraw from my pension?
You can only withdraw from your pension if you’re opting out of your scheme less than 30 days after you opted in. Otherwise, you’re welcome to transfer your contributions over to another pension scheme whenever you like. The easiest way to do that is to contact the pension scheme provider – ours is called Smart Pensions.
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