Pension on a £30,000 salary — the auto-enrolment trap.
What pension can a £30,000 salary build? See tax, NI, auto-enrolment minimums, and why 8% isn't enough for a comfortable retirement.
£30,000 is the salary where the dangerous gap between 'I'm contributing the legal minimum' and 'I'm contributing enough' becomes most visible. At this salary you pay around £3,486 in income tax and £1,394 in employee NI per year. The auto-enrolment minimum 8% of band earnings (around £1,900/year) feels like a meaningful contribution but produces a final pot of only around £180,000 after 40 years of compounding at 5% — which provides around £7,200/year of safe drawdown income. Combined with the full state pension you'd retire on around £19,000/year before tax. The PLSA 'moderate' retirement standard for an individual is £31,300/year. Closing that gap requires a personal contribution rate closer to 12-15%. On £30k, raising your personal contribution from 5% to 10% costs around £1,150/year — about £22/week — and roughly doubles your eventual retirement income.