Pensions During Sick Leave
What happens to pension contributions during sickness absence? Understand workplace pension rules for employees on sick leave.
Last updated: 30 January 2025
Pension treatment during sick leave depends on pay status.
Sick Leave and Pensions
General Rule
| Position | Detail |
|---|---|
| Contributions | Based on pay |
| Paid sick leave | Contributions continue |
| Unpaid sick leave | Usually pause |
| Membership | Continues throughout |
Key Difference from Maternity
| Sick Leave | Maternity |
|---|---|
| Based on actual pay | Employer on normal salary |
| Both on reduced | Employer maintains level |
| No special protection | Special protection exists |
Paid Sick Leave
Company Sick Pay
| If Receiving | Position |
|---|---|
| Full pay | Full contributions |
| Reduced pay | Lower contributions |
| Based on | Actual earnings |
| Normal rules | Apply |
Statutory Sick Pay Only
| If On SSP | Position |
|---|---|
| £116.75/week | Current rate |
| Below threshold | Likely |
| May be no | Qualifying earnings |
| Contributions | May be zero |
Calculating Contributions
During Paid Sick Leave
| Element | Basis |
|---|---|
| Employer contribution | Actual pay |
| Employee contribution | Actual pay |
| Qualifying earnings | On actual pay |
| May be lower | Than usual |
Example on Full Sick Pay
| Element | Amount |
|---|---|
| Salary maintained | £2,500/month |
| Employer (3%) | £75 |
| Employee (5%) | £125 |
| Same as | Normal working |
Example on SSP Only
| Element | Amount |
|---|---|
| SSP | £506/month approx |
| Below lower threshold | £6,240/year |
| Qualifying earnings | Zero |
| Contributions | Zero |
Unpaid Sick Leave
No Pay Received
| Position | Detail |
|---|---|
| No earnings | No contributions required |
| Employer | Not required |
| Employee | Not required |
| Membership | Usually continues |
Long-Term Position
| If Unpaid | For Long |
|---|---|
| May become | Dormant member |
| Pot remains | Invested |
| No contributions | Adding |
| Resume | On return |
Membership Continuation
Throughout Absence
| Position | Detail |
|---|---|
| Stay enrolled | In scheme |
| Pot continues | To exist |
| Investment | Continues |
| Death benefits | Usually maintained |
Scheme Rules
| Check | For |
|---|---|
| Continued membership | Terms |
| Death benefits | During absence |
| Insurance | Linked cover |
| Specific rules | May vary |
Long-Term Sickness
Progression
| Stage | Typical Position |
|---|---|
| Initial | Full sick pay |
| Mid-term | Reduced pay |
| SSP period | 28 weeks max |
| Post-SSP | Usually unpaid |
Pension Impact
| Stage | Contributions |
|---|---|
| Full pay | Normal |
| Reduced pay | On reduced amount |
| SSP only | Likely minimal/none |
| Unpaid | None required |
Employer Practices
Common Approaches
| Practice | Detail |
|---|---|
| Legal minimum | On actual pay |
| Continue full | As benefit |
| Varies | By employer |
| Check policy | Important |
Enhanced Benefits
| Some Employers | May |
|---|---|
| Continue full contributions | Despite reduced pay |
| Top up | During sickness |
| As part of | Benefits package |
| Not required | But possible |
Employee Options
During Sick Leave
| Can | Detail |
|---|---|
| Continue contributing | If have pay |
| Stop contributions | Opt out |
| Cannot | Contribute without pay |
| Resume | On return |
Voluntary Contributions
| Position | Detail |
|---|---|
| Cannot usually | Add without earnings |
| Annual allowance | Needs earnings |
| Limited | Options during no pay |
Return to Work
Resuming Contributions
| On Return | Position |
|---|---|
| Normal contributions | Resume |
| Based on | Return pay |
| Automatic | Usually |
| Full membership | Continues |
Phased Return
| If Part-time | Initially |
|---|---|
| Lower earnings | Perhaps |
| Lower contributions | On lower pay |
| May still be | Eligible |
| Builds up | Over time |
Death in Service
During Sick Leave
| Position | Detail |
|---|---|
| Usually maintained | Benefits |
| Scheme rules | Apply |
| Check | Specific terms |
| May be | Enhanced cover |
Death Benefits
| Typically | Detail |
|---|---|
| Pension pot | To beneficiaries |
| Any life cover | May continue |
| Nomination | Important |
| Scheme specific | Rules |
Record Keeping
Track Absence
| Record | Why |
|---|---|
| Leave dates | Contribution periods |
| Pay received | Contribution basis |
| Scheme notifications | If required |
| Member records | Keep updated |
Group Income Protection
If You Have GIP
| Position | Detail |
|---|---|
| Insurance benefit | Pays |
| May include | Pension contribution |
| Check policy | Terms |
| Valuable | Benefit |
Continuing Pension
| Some GIP | Includes |
|---|---|
| Pension contributions | In benefit |
| Maintains | Savings |
| During | Long-term absence |
| Policy dependent | Check terms |
Employer Duties
Assessment
| Must Still | Do |
|---|---|
| Assess | At enrolment date |
| Check | Ongoing eligibility |
| Based on | Actual situation |
| Process | Correctly |
Communication
| Should | Inform |
|---|---|
| Employee | Of pension position |
| During | Extended absence |
| Options | Available |
| On return | Resumption |
Summary
Key Points
| Element | Detail |
|---|---|
| Paid leave | Contributions on actual pay |
| Unpaid leave | Usually no contributions |
| Membership | Continues |
| Resume | On return |
Differs from Maternity
| Factor | Sick Leave |
|---|---|
| Employer contribution | On actual pay |
| No special | Protection |
| Both reduce | With reduced pay |
Related answers
Pension Contribution Rates
What are the minimum pension contribution rates? Understand employer and employee contributions for auto-enrolment.
Qualifying Earnings for Pensions
What are qualifying earnings? Understand how pension contributions are calculated for auto-enrolment.
Workplace Pension Contributions
How much must employers contribute to workplace pensions? Understand minimum contribution rates and qualifying earnings.
Frequently Asked Questions
- Do pension contributions continue when I'm off sick?
- It depends on whether you're being paid. During paid sick leave (including SSP), contributions continue based on actual pay received. During unpaid sick leave, neither party is required to contribute, though membership typically continues.
- Are employer pension contributions based on full salary or sick pay?
- For auto-enrolment, employer contributions are based on actual qualifying earnings - the pay actually received during the period. If you're on reduced pay (like SSP only), both contributions are calculated on that lower amount.
- What if I'm on long-term sick leave?
- During long-term absence, pension membership usually continues but contributions depend on pay. When SSP ends and you're unpaid, contributions may pause. Some employers continue contributions as a benefit. Check your contract and scheme rules.