The planned increase means the amount you’ll pay towards building your benefits will rise from 9.6% of salary to 11% - the amount your employer contributes will also go up from 21.1% to 23.7%.
Why is this happening?
As part of the 2018 valuation, the Joint Negotiating Committee (JNC) decided to change contribution rates payable by members and employers – this was done to address the scheme’s funding position and the cost of providing your pension benefits. The JNC phased the increases over the last three years to lessen the impact on members and to give you more time to plan for them.
We recommend that you should plan for higher contributions in October but…
As part of the 2020 valuation the JNC, which makes decisions on how the increase to the overall contribution rate is to be dealt with (by changes to contributions and/or benefits), may agree proposals that could result in the October increases not happening. If the increase doesn’t go ahead, we’ll let you know.
We’ll keep you up to date on progress through our regular emails, and you can visit our valuation page, which is updated regularly, for more information.
So, what do these rises look like in practice?
We’ve put together some examples to show the cost of the October increases for different salaries – this will help you get a feel on how it will impact your take home pay.
These figures are based on members living in England, Wales or Northern Ireland and using salary sacrifice. The impact on take home pay could be slightly different for those who don’t use salary sacrifice, or those employed in Scotland.
Whilst contribution rates might change, when saving with us you’re building a pension that gives you the security of a guaranteed retirement income when you retire, tax-free cash and life cover, that will look after your loved ones, should anything happen to you.
Find out more about your USS pension online and see the benefits your membership provides to you and your loved ones.
Published: 27 July 2021