Work Place Pension

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UK Business Directory

Legacy Full Member
Nov 16, 2016

I haven't fully understood the governments work place pension.

1) An employee pays in an amount of money into their Pension Pot via their salary and the employer pays in. Sounds good. But how does the employer benefit from paying the extra amount? Does the government provide tax relief on the amount the employer pays?

2) If the employee was to pass away, would any amount in the deceased's pension pot be passed onto next of kin? or would that money be lost?

3) Finally, if the employee was no longer able to work due to a critical illness, can the funds be released or would he/she need to wait until 65 or whatever the pension age is.

In terms of 2 and 3, the money is gone, as far as you are concerned. It stays in the employees pension pot, and will be dispersed as per the arrangements of that pot.

In terms of 1, it is a legal requirement, and in the future will increase, in percentage terms. It will never be optional.
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