​​Change in working patterns

This page explains how changes to your working pattern could affect your pension. The impact will vary depending on what scheme you’re in.

Any changes to your working pattern, or breaks in service, need to be agreed with your employer.

On this page:

How your pension is worked out Part-time and seasonal working Varying your working hours Career breaks Special and Family leave Ways to increase your pension

​​How your pension is worked out

​​To understand how changes to your working pattern may affect your pension, it helps to understand how your pension is calculated.

Your classic pension = 1/80 x pensionable earnings x reckonable service

Your premium pension = 1/60 x final pensionable earnings x reckonable service

Your classic plus pension is worked out like classic for service up to 30 September 2002, and in premium for service from 1 October 2002, but using your final pensionable earnings in both parts of the calculation.

Your nuvos pension = 2.3% x your pensionable earnings each year up to 31 March and is adjusted each year in line with rises in the cost of living.

Your alpha pension = 2.32% x your pensionable earnings each year up to 31 March and is adjusted each year in line with rises in the cost of living.

Your partnership pension account

Your employer pays contributions into your partnership pension account. You can also choose to contribute, and your employer will match contributions up to 3% of your pensionable earnings.

Your pension pot is invested and can be used to provide an income in retirement or paid to your beneficiaries when you die.

When you retire, you can choose to:

• take a guaranteed income for life, also known as an annuity
• take a flexible income via income drawdown. This allows you to either withdraw regular income, payable monthly or yearly, or take unlimited withdrawals. All withdrawals, other than pension commencement lump sums, are treated as taxable UK income
• take your full fund as cash, in which case the first 25% of the amount is tax-free (subject to the limits set by HM Revenue & Customs and the Lump Sum Allowance). Anything over this is taxed as regular UK income at your marginal rate of tax.
• use a combination of the options to suit your circumstances.

The value of your pension will depend on:

• how much you pay in
• how well your chosen funds perform
• how much is taken out in charges applied to your fund
• how and when you choose to take your benefits.

Part-time, term-time and seasonal working

Part-time working

classic, classic plus and premium

Working part-time will reduce your pension because it reduces your reckonable service.

Your pension is based on:

• your reckonable service, and
• your full-time equivalent pensionable earnings.

Examples

Emma is in premium. Her full-time equivalent annual salary is £27,000 and her full time equivalent hours would be 36 hours a week.

She works 24 hours a week, so her part-time annual salary is £18,00. (24/36ths of £27,000).

If Emma works for 6 years part-time, she will build up:

• reckonable service = 24/36 x 6 = 4 years pension
• 4 (years) x 1/60 x £27,000 (her full-time equivalent salary) = £1,800

Tom is in classic. He has worked full-time (36 hours per week) for 15 years on an annual salary of £25,000. He is now switching to part-time which will reduce his hours to 24 hours per week,

Tom has already built up 15 years’ reckonable service. It Tom works for 3 years part-time he will build up:

• reckonable service = 24/36 x 3 = 2 years’ pension + existing 15 years’ = 17 years pension.
• 17 (years)/80 x £25,000 (full-time salary) = £5,312.50 and a lump sum of three times his pension which equals £15,937.50.

nuvos

Each year, you add 2.3% of your pensionable earnings to your nuvos pension, which is adjusted annually for cost of living. If you work fewer hours and your pay drops, your pension will decrease accordingly.

alpha

Each year, 2.32% of your pensionable earnings is added to your alpha pension, which adjusts annually for cost of living. If you work fewer hours and your pay decreases, your pension earned will also decrease.

Lump sums and part-time working

classic

You receive an automatic lump sum of three times your pension. If your pension is reduced, your lump sum will also reduce.

premium, nuvos and alpha

You can give up some of your pension to provide a lump sum. If you reduce your pension by working part-time, it will reduce the maximum lump sum you can take (as it is a multiple of your pension).

classic plus

You will receive an automatic lump sum (for service up to 30 September 2002). This is calculated as three times your pension, therefore if you reduce your reckonable service by working part-time it will reduce your automatic lump sum.

No automatic lump sum is payable for service from 1 October 2002 onwards. However, you can choose to convert some of your pension into a lump sum. This is calculated as a multiple of your pension, if you reduce your pension by working part time, it will reduce the amount of lump sum you can take.

Part-time working on medical grounds

If your employer agrees a temporary reduction in hours for medical reasons:

• if you qualify for sick leave, your pensionable service is based on your normal hours
• if you don’t qualify for sick leave, only your actual hours will count.

Term-time and seasonal working

Term-time or seasonal working means working full or part-time hours, but for fewer weeks in the year.

classic, classic plus and premium

Pensionable earnings are calculated based on your full-time equivalent salary

Reckonable service is based on hours worked.

Reckonable service calculates as:

(Total annual hours worked ÷ 52.2) × full-time weekly hours

nuvos

Each year, you add 2.3% of your pensionable earnings to your nuvos pension, which is adjusted annually for cost of living. If you work fewer hours and your pay drops, your pension will decrease accordingly.

alpha

Each year, 2.32% of your pensionable earnings is added to your alpha pension, which adjusts annually for cost of living. If you work fewer hours and your pay decreases, your pension earned will also decrease.

Flexible and shift working

Flexible or shift working usually means you work a fixed number of hours each week but choose when to work them.

If you work full-time hours, your pension is not affected.

Compressed hours (for example, working full-time hours over fewer days) do not affect your pension.

Varying your working hours

classic, classic plus and premium

Each period of service will be worked out and added together to give your total pension.

The examples below are based on a 36 hour week:

Working pattern	Period	Calculation	Reckonable service
Full-time working	10 years	(10 × 1)	10 years
Part-time working (20 hours a week)	6 years	(6 × 20/36)	3.33 years
Part-time working (3 full days a week)	3 years	(3 × 3/5)	1.8 years
Full-time working	8 years	(8 × 1)	8 years
Total			23.13 years

nuvos

Each year, you add 2.3% of your pensionable earnings to your nuvos pension, which is adjusted annually for cost of living. If you work fewer hours and your pay drops, your pension will decrease accordingly.

alpha

Each year, 2.32% of your pensionable earnings is added to your alpha pension, which adjusts annually for cost of living. If you work fewer hours and your pay decreases, your pension earned will also decrease.

Career breaks

If you take a career break agreed with your employer, you will not build up pension benefits during this time. You are not required to make pension contributions while you are on a career break.

When you return to work, you'll usually rejoin your previous pension scheme. If you were due to transfer to alpha, this will still happen.

You may be able to increase your pension to make up for the break. See options for boosting your pension.

Contributions during a career break

You cannot pay contributions into your scheme during a career break.

I have a partnership pension account - can money be paid into my investment fund while I’m on a career break?

Your employer will not make any contributions to your fund while you are on a career break.

As it is your investment fund, you can decide if you wish to make voluntary payments to increase the value of your fund while you are on your career break.

Special leave and family leave

Special leave

If I need to take additional leave due to personal circumstances - how will this affect my pension?

If your additional leave is agreed as paid leave, your pensionable earnings during this leave period will be based on your normal rate of pay.

You will continue to pay pension contributions during your leave, these will be worked out as a percentage of the actual pay you receive. This will be the normal contribution rate of whichever scheme you are a member. View our current contribution rates.

Paid special leave counts towards reckonable service for classic, classic plus, premium, nuvos, and alpha pensions. Most unpaid special leave does not count, though there are some exceptions.

If your special leave in nuvos or alpha is paid, you continue to build up pension.

Maternity, paternity and adoption leave

All paid maternity, paternity and adoption leave, and any unpaid ordinary maternity and paternity leave counts towards your pension.

Any unpaid additional maternity or adoption leave does not count towards your pension.

Parental leave

Parental leave allows parents to take time off to look after a child or plan for the child’s welfare.

Parental leave is normally unpaid. If it is unpaid, it does not count towards your pension.

Time off for dependants

Time off for dependants allows employees to take a reasonable amount of time off work to deal with certain unexpected or sudden emergencies and to make any necessary long-term arrangements.

Unpaid time off for dependants does not count towards your pension

Ways to increase your pension

If you reduce your working hours, your pension will reduce. You may wish to consider ways of increasing the value of your pension benefits by:

• buying added pension
• purchasing additional voluntary contributions
• increasing your partnership contributions

Find out more information on increasing your pension.