Contributions
HOW MUCH DOES IT COST?
You can choose what percentage of your pay you contribute each month. The amount you decide to contribute during your membership of the Scheme is a key factor in determining how much income you will have in your retirement.
You can contribute anything between a minimum contribution of 2% of your gross earnings and a maximum of 100%.
From April 2018, the minimum contribution will rise to 3%, and increasing again in April 2019 to 5% to comply with auto-enrolment requirements.
HELPING YOU SAVE
Unipart helps you to save by making contributions to your account too. The Company will match the percentage contribution you make, up to a certain level.
When deciding your own contribution level, you should consider the level that the Company will match, as this is a valuable contribution to your Personal Retirement Account.
CALCULATING YOUR PENSION CONTRIBUTIONS
You don’t have to pay income tax on the contributions you make to your pension up to certain limits. This means the actual cost to you of saving each month is lower than you might think.
Example:
Alex earns £24,000 a year. He decides to make monthly contributions of 5% of his gross earnings, which works out at £100 a month. However, because Alex gets tax relief on his pension contributions at 20%, the actual cost to him of saving £100 is only £80.
The Company also pays monthly contributions, which are 4% of Alex’s gross earnings.
| Alex pays | £80 |
| Tax relief | £20 |
| Unipart pays | £80 |
| Total amount paid to Alex’s account each month | £180 |
So, with Company contributions and tax relief, the actual cost to Alex of saving £180 a month into his Personal Retirement Account is just £80.
TAX RELIEF
There are limits to the amount of tax relief you can receive on your pension contributions. The Annual Allowance is currently £40,000, although this can be reduced to £10,000 for individuals earning over £150,000.
If you have already accessed some DC savings as a taxed lump sum or as income drawdown but are continuing to contribute to the Scheme, the Money Purchase Annual Allowance will apply to you. It is currently £4,000.
If the value of all your pensions from all schemes, including those separate from the Company, is over the Lifetime Allowance of £1,030,000 (as at April 2018), you will incur a tax charge on the amount exceeding this. If you think you might be subject to a Lifetime Allowance tax charge, please contact Capita, the Scheme administrator.
MAKING CHANGES TO YOUR CONTRIBUTIONS
If you want to, you can change your contributions at the start of the Scheme year by completing a contribution change form no later than 17 March for the change to take effect from 1 April.
At other times, if you want to change your contributions because of a change event, you can apply to the Pensions Department to make an immediate change.
ONE-OFF CONTRIBUTIONS
You can also pay one-off lump sum contributions into your Personal Retirement Account at any time.
TRANSFERRING INTO THE SCHEME
If the Trustees agree, you might be able to transfer the benefits you have built up in another pension scheme into the Scheme. These could include funds from a previous employer’s pension scheme or a personal arrangement. Further details about transferring into the Scheme are available from the Scheme administrator, Capita. unipart@pensionsoffice.com
WHAT IF I'M ABSENT FROM WORK?
If you are temporarily absent from work, for example because of illness or maternity leave, while you are still being paid by the Company, both your contributions and the Company’s will continue to be paid into your Personal Retirement Account.
If your pay is reduced because of maternity, paternity or adoption leave, the Company’s contributions will be based on the full rate of pay that you would have received if you had continued working. However, your contributions will be a percentage of your actual earnings during that period.
If your earnings are reduced because of ill health, both your contributions and the Company’s will be a percentage of your actual earnings during that period.
HOW OUR PENSIONS WORK
Unipart pensions schemes are simple and flexible with a range of options to secure your retirement.
- You & Unipart both contribute
- Your savings are invested
- You decide how to draw the money when you retire
YOUR QUESTIONS
Want to find out a little more? Our commonly asked questions might be able to help you…
SAVE FOR YOUR FUTURE
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CONTRIBUTORY PENSION SCHEME
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WE'RE HERE TO HELP
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