Is a 5% employer pension contribution good?

The short answer

It's above the legal minimum, but middling. UK employers must contribute at least 3% under auto-enrolment, so 5% is better than the floor — but good schemes pay 8% or more, and the most generous employers contribute 10–15%. The difference between offers can be worth thousands of pounds a year of essentially free money.

The benchmarks

As a rough guide: 3% is the legal minimum and signals an employer doing only what's required. 4–6% is common across the private sector. 8% or more is genuinely good. 10%+ is excellent and most often seen in financial services, universities and parts of the public sector. Some employers also offer matching — for example, they'll pay 7% if you pay 5% — which is worth maximising whenever you can afford to.

What it's worth in real money

On a £40,000 salary, a 3% employer contribution adds £1,200 a year to your pension. An 8% contribution adds £3,200 — a £2,000-a-year difference between two otherwise identical offers. Because pensions compound over decades, that gap doesn't just add up, it multiplies: an extra £2,000 a year invested over 30 years could plausibly grow to well over £150,000.

The fine print worth knowing

Some employers calculate contributions on your full salary; others use "qualifying earnings" — a band of your salary (currently roughly £6,240 to £50,270) — which makes the same headline percentage worth less. Ask which one applies. Also check whether the employer contribution rises with service or with your own contribution rate, and whether benefits like death-in-service are tied to staying in the scheme.

How OfferWise treats it

Enter both the employer and employee pension percentages for each offer in OfferWise and the pension value is calculated into the total package and the offer score automatically — so a lower salary with a strong pension gets the credit it deserves.

Comparing job offers? OfferWise turns salary, pension and benefits into one clear score — free.