Who is eligible for a partnership pension account?
If you're a new joiner, you’ll receive a new starter pack within eight weeks of your start date, which provides details of your pension options.
If you’ve just joined the Scheme, and you choose to go into partnership within one month of joining, your contributions to partnership will be backdated to your first day of service.
If you’ve been a member of the Scheme for more than one month, you can switch to partnership (subject to eligibility), but your contributions will not be backdated. To switch, you must complete a Pension Switching form and return it to your employer’s HR Department two months before the date you want to switch.
How does the partnership pension account work?
Your employer will contribute on your behalf, and you may choose to contribute too. The value of the pension pot when you retire will depend on the contributions you’ve paid into the Scheme and the return on your investment (after charges).
Your pot can either fund your retirement or you can leave it to someone in the event of your death.
What happens when I leave the partnership pension account?
If you leave your job, your employer’s contributions will stop.
Your pension fund is yours, no matter what.
Depending on the pension arrangements in your new job, you may be able to carry on paying into your partnership pension account, or you can leave it to earn investment returns. You may want to transfer your fund to another pension provider or to your new employer’s pension scheme. The choice is yours, but if you’re considering transferring your fund to another provider or to a new employer’s pension scheme, make sure you understand what you’re giving up and what you’re getting in return.
Your employer will notify your partnership pension provider that you’ve left employment, and the provider will contact you separately.
How much will I contribute to my partnership pension account?
You do not have to contribute anything.
Your employer will pay an age-related contribution and if you contribute too, your employer will pay an additional amount to match your contributions, up to 3% of your pensionable earnings. Therefore, if you decide to contribute 2% of your pensionable earnings, your employer will pay the same on top of the age-related contribution. If you decided to contribute 5%, your employer would pay an extra 3%, as it’s capped at 3% of your pensionable earnings. Your contributions will be based on your pensionable earnings, so if you’re receiving reduced pay, you’ll only pay contributions on the pay you actually receive.
What will my employer contribute to my partnership pension account?
Your employer will contribute a percentage of your pensionable earnings. This varies according to your age at the beginning of the tax year (as at the last 6 April) so it may increase in the future. Current contribution rates are shown in the table below.
| Age at the last 6 April | Percentage of your pensionable earnings |
|---|
| Under 31 | 8% |
| 31 to 35 | 9% |
| 36 to 40 | 11% |
| 41 to 45 | 13.5% |
| 46 or over | 14.75% |
Please note: there are no additional payments made to those with birthdays shortly after 6 April. Your employer will make these contributions even if you do not contribute.
You can always decide to pay in at a later stage. If you do, your employer will then match the level of your contributions, up to 3% of your pensionable earnings.
What earnings are pensionable?
As a rule, only permanent items of pay are pensionable. This will include any allowances your employer tells you are pensionable, but will not include some payments, like overtime. Bonus payments do not normally count as pensionable earnings, but if you receive pensionable bonus payments, your employer (and you, if you choose to contribute) will pay contributions on them. You may also have some non-cash pensionable earnings. For example, some people may receive a 2% uniform allowance, and others may have an allowance for accommodation. In these circumstances, your employer (and you, if you choose to contribute) will also pay contributions based on the equivalent cash value of these non-cash pensionable earnings. Your payslip should show the level of your pensionable earnings.
How much am I allowed to contribute to my partnership pension account?
There is no limit on what you can pay into the partnership scheme. Subject to the annual allowance, you’ll receive tax relief on any contributions you make up to 100% on whichever is the higher of your taxable earnings or £3,600 (inclusive of basic rate tax relief).
Details of the annual allowance can be found on the Tax on your private pension contributions page on the GOV.UK website.
Will I receive tax relief?
Your employer’s contributions are based on your gross pay (pay before tax), but your own contributions are taken from you after tax.
You pay a reduced contribution, which considers the tax relief that we’ll claim back on your behalf. So, for example, if you wanted to pay £100, we’d take £80 from your net pay (£100 less £20 basic-rate income tax). We’d then claim back £20 from HM Revenue & Customs, so the total amount going into your pension fund based on your contributions, would be £80 + £20 = £100.
If you’re a higher rate or additional rate taxpayer, you should contact HM Revenue & Customs to claim the extra tax relief.
How do I make my payments?
Your employer will take regular (normally monthly) contributions from your pay and pay it automatically to us.
Do I pay National Insurance on my pension contributions?
Yes, you pay National Insurance (NI) contributions at the standard rate.
Which scheme can I switch to from partnership?
If you decide to switch from the partnership scheme, you’ll only be able to switch to the Civil Service defined benefit scheme you’re currently eligible to join.
You can switch from the partnership scheme at any time. However, you can only make one switch per 12 calendar months.
To switch, you must complete a Pension Switching form and return it to your HR Department two months before the date you want to switch.
How do I choose what to invest in with my partnership pension account?
Your contributions will be invested in the default fund: The Legal & General Target Date Funds. If you wish, you can choose your own investment from the investment range available. Legal & General’s Your guide to investing contains details of the default fund and their full investment range.
Please read Legal & General’s investment guide carefully before deciding how to invest.
Please note: the value of some investments can go down as well as up and you should review your investments regularly.
You may also wish to speak to an Independent Financial Adviser (IFA) before making your choice. See the Financial Conduct Authority website for tips on how to find an adviser.
Do I have to choose an investment fund?
Unless you tell us otherwise, your contributions will be invested in the default fund: The Legal & General Target Date Funds.
Legal & General’s Your guide to investing contains details of the default fund. Please note: the value of some investments can go down as well as up and you should review your investments regularly.
You may also wish to speak to an Independent Financial Adviser (IFA) before making your choice. See the Financial Conduct Authority website for tips on how to find an adviser.
When can I access my money?
Under current legislation, you can draw your partnership pension at any time from age 55. You don’t have to retire to take your pension. You choose the timing to fit in with your personal circumstances. You also decide whether or not you want to provide a pension for your dependants after your death.
If you are 50 or over, or are retiring on ill health grounds, you can get free and impartial guidance on your options by booking an appointment with Pension wise. Appointments are available by telephone and face-to-face and take about 45 minutes. Further details are available at www.pensionwise.gov.uk/
How can I access my money?
You can usually take up to 25% of your pension pot as a tax-free lump sum although you’re not required to do so.
Your options for the remaining fund after any tax-free cash is taken include:
A regular income payable for life, also known as an annuity. You can select options to allow the income to increase with inflation and/or to provide benefits following your death.
A flexible income via income drawdown. This allows you to either withdraw regular income, payable monthly or yearly, or to take unlimited withdrawals. There may be minimum withdrawal amounts imposed by the providers. (F)
Take your full fund as a cash lump sum. (F)
Or a combination of the options to suit your circumstances.
You may have to transfer your partnership pension account to a different pension arrangement before you can take some of these options. We’ll confirm the position.
Other than the tax-free cash lump sum, all withdrawals are treated as taxable UK income. Additionally, if you take money from your account under a flexible option (marked F above), you may be subject to the money purchase annual allowance. More information about this can be found on the Tax on your private pension page on the GOV.UK website.
If you’re 50 or over, or are retiring on ill health grounds, you can get free and impartial guidance on your options by booking an appointment with Pension Wise. Appointments are available by telephone and face-to-face and take about 45 minutes. Further details are available on the Pension Wise website.
Will the Government guarantee my partnership pension account?
The Government cannot guarantee your partnership pension account.
How big will my pension pot be?
The amount of your pension pot will depend on:
the amount of money invested in your fund
the performance of your investment fund
when you decide to take your pension.
It’s important that you give your pension fund a regular health check to make sure you’re on track to get the size of fund that you want. You’ll receive annual statements that show the value of your fund to help you with this. And remember that contributions made while you’re young are going to have more years to grow.
You may wish to speak to an Independent Financial Adviser (IFA) to review your pension savings. See the Financial Conduct Authority website for tips on finding an adviser.
Do I have to retire from my job before I can access my money?
No. Drawing your pension doesn’t have to be linked to retiring from work.
What happens if I die before I draw my pension?
If you die before you take your retirement benefits, a lump sum will be payable. The Trustees of the Legal & General Master Trust will use their discretion as to who to pay the benefits to but will take your wishes into account. This means that the benefits paid this way do not form part of the estate and therefore are not normally assessable for inheritance tax.
To nominate someone to receive these benefits, simply complete Legal & General’s Nomination of beneficiary form.
If your circumstances change at any time, you should complete this form again to change your beneficiary.
If you die before you leave pensionable employment, Civil Service Pensions may also pay a lump sum of three times your pensionable earnings to your death benefit nominee. You can change your nomination at any time by using the Death Benefit Nomination form.
What is Legal & General's management charge?
As of 1 October 2022, the charge reduced from 0.17% to 0.12%.
Legal & General administer partnership and concord pension accounts, and the Civil Service Additional Voluntary Contribution Scheme.
