Contributions

You can choose how much you want to contribute to the Scheme each month. This amount is a key factor in determining how much income you will have in your retirement. The earlier you increase your contributions, the more likely you are to benefit from investment returns. 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.

Your employer helps you to save by making contributions to your account too. The Company will match the contributions you make, up to a certain level. This matched contribution depends on how much you contribute yourself and how long you have been a member of the Scheme.

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.

The table shows the maximum amount the Company will contribute as a percentage of your gross earnings each month. The Company will not pay contributions that are greater than your own, so to obtain the maximum Company match, you will need to contribute at least that amount yourself.

Years in Scheme (including as a member of the Final Salary section)	Maximum Company contribution
0 – 4 years	2%
5 – 9 years	3%
10 – 14 years	4%
15 – 19 years	5%
20 years or more	6%

You don’t have to pay income tax on the contributions you make to your pension up to certain limits. This means your contributions will qualify for tax relief based on the highest level of income tax you pay. Therefore, the actual cost to you of saving each month is lower than you might think.

Example:

Tom is 40 years old and earns £24,000 a year. He decides to make monthly contributions of 5% of his gross earnings. He has been a member of the Scheme (including the Unipart Scheme previously) for 10 years and so the Company will make contributions of 4% of his gross earnings.

Tom’s monthly gross earnings	£2,000
Tom’s contribution of 5%	£100
Tax relief	£22
Monthly cost to Tom	£78
The Company’s contribution of 4%	£80
Total amount paid to Tom’s account each month	£180

So, with Company contributions and tax relief, the actual cost to Tom of saving £180 a month into his Personal Retirement Account is just £78. [Example taken from Scheme Guide – Tom pays income tax at 22%?]

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.

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 14 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 Group Pensions Department to make an immediate change.

You can also pay one-off lump sum contributions into your Personal Retirement Account at any time.

If your regular monthly contributions are below the necessary level to obtain the maximum Company match but you then make a one-off lump sum payment as an additional contribution, the Company will also match that payment, up to the maximum total Company-matched contribution shown in the table above.

If the Trustees agree, you might be able to transfer the benefits you have built up in another pension scheme into the DC Section of 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 Group Pensions Department.

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 earnings are 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.

Unipart pensions schemes are simple and flexible with a range of options to secure your retirement.

Want to find out a little more? Our commonly asked questions might be able to help you…