How much does it cost?
classic
Paying for your benefits
Your contributions
Your pension, together with your pay, forms part of your total benefits package. Although you do not contribute towards the benefits you receive under classic, salaries are set at levels that take account of the value of the benefits provided. However, you must contribute 1.5% of your pay, mainly towards the cost of providing benefits for your widow, widower or civil partner after your death. These contributions are taken from your pay before we work out tax, so you will automatically receive full income-tax relief at the highest rate you pay. Also, as classic is contracted out of the State Second Pension (S2P), you pay lower National Insurance contributions
If you have a dependent child who is permanently disabled and who is not likely to be able to earn a living, you can choose to pay an additional contribution of 2% of your pay (or more) to provide a child’s pension after your death. This is called an invalidity pension. The pension will be paid when the child is no longer eligible for the children’s pension under classic.
Employers’ contributions
Apart from the 1.5% contribution you make towards your pension, your employer makes further contributions. These contributions are based on salary bands and are reviewed every three years. See Accruing Superannuation Liability Charges.
