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Joining a Scheme

Most people working full time earn considerably more than the new State Pension. Without a company pension, they can expect a sharp drop in income when they decide to take their benefits.

Find out more about:

State Pension Forecast

To find out how much of a state pension you may get, visit or phone 0800 731 0175.


A company pension can help

Joining your company pension now could help to give you more financial freedom when you take your benefits – helping to improve your lifestyle or pay the bills.

Before making any decisions, please read your joining pack which has full information about your employer's scheme.

Pensions are a long-term investment. The retirement benefits you receive from your pension plan will depend on a number of factors including the value of your plan when you decide to take your benefits, which isn't guaranteed and can go down as well as up. The value of your plan could fall below the amount(s) paid in.


Should I join my employer's scheme?

Joining the scheme is up to you – but here are some things you should think about:

  • how much other savings and investments will you have to live on when you retire?
  • it's very likely that your employer will contribute to your pension – which could mean your retirement income will be more than if you were just contributing yourself.
  • saving for a pension is tax-efficient. (Although please remember that tax treatment depends on your personal circumstances and may be subject to change in the future.)

If you want to join, simply complete the joining form (or employee authorisation form) provided by your employer and return it to them.


What advice can I get?

If you're not sure about joining the scheme, or you need advice about how much to pay in or what investments to choose, you may want to seek professional financial advice.

You can speak to the adviser for your employer's scheme or to your own financial adviser. If you don't have one, here's a website that can help you find a fully qualified adviser. Please note you may be charged a fee for this service.

If you're unsure how to complete your joining forms, please speak to your adviser, employer or contact us.


Are payments expensive?

A company pension can be an effective way for you to save for retirement, because you may not be the only one paying in. Have a look at this example for retirement which assumes you and your employer are both paying in 5% of your earnings:

For every £1,000 you earn, this is how your pension could benefit:

5% Employee payment    
You pay   £40
Taxman pays*   £10
5% Employer payment   £50
Total monthly payments into your pension fund   £100

* Equivalent to 20% of the gross payment. Assumes UK taxpayer. If you are a Scottish taxpayer the tax relief you will be entitled to will be at the Scottish rate of income tax, which may be different from the rest of the UK.

The value of the tax benefits of a personal pension depend on your personal circumstances. Both your circumstances and tax rules may change in the future. Higher or additional rate taxpayers may be able to claim further tax relief.


How much should I pay in?

How much you decide to pay in will depend on a number of things, including:

  • How much you think you'll need to support yourself in retirement
  • How long you'll be saving for
  • How much other people, including your employer, are paying in on your behalf
  • How much you can afford.

There is no maximum limit on the payments you can make to a pension each tax year, however, limits do apply to the amount of tax relief you can receive. Your joining pack explains what they are.

If you need to vary your payments, or stop them for a time, you can although this will reduce what you get back. Again, your joining pack explains your options.


What if I haven't got enough spare cash?

If you're a ‘live-for-today' person, or are on a tight budget, you may wonder whether you have the money to pay into a pension – without curtailing your lifestyle.

Try out our indulge-O-meter and see how much you're currently spending on little treats. You may be surprised to see how little cut backs can soon add up to big savings.

Can you think of ways to find spare cash for your pension?


What if I wait before joining?

Delaying can be expensive.It is likely that your pension pot will be smaller or you'll need to pay in more because you'll be saving for less time.