Adjusting for part time
If you work part time, your contributions are adjusted to reflect this. You pay contributions based on the pensionable salary you would receive if you were full-time, less the lower earnings limit, but reduced in line with the number of hours you actually work compared with ‘full-time’ hours.
Example
If you work three days a week on £12,000 pensionable salary:
£12,000 adjusted upwards to the ‘full-time’ equivalent is £12,000 x 5 (days in a full working week) then divided by 3 (the days you work) = £20,000.
Take away the lower earnings limit (for the 2009/2010 tax year): £20,000 – £5,044 = £14,956.
Adjust back down for working 3 days a week: 3/5 x £14,956 = £8,973.60.
So, your contributions will be based on £8,973.60 a year.