Pension and retirement information
The State Pension starts between 65 and 68 depending on your age. Find out when your State Pension will start.
State Pensions changed in 2016 so that going forward people with more than 10 qualifying years on their National Insurance record will get a State Pension of £8,767.20 per year before tax (2019/20).
Some people’s State pensions will be calculated by comparing the old and new basis. If you would like to know how much you are likely to get you can get a forecast.
The State Pension will increase in payment. You can delay taking your State Pension which could increase the payments you get when you decide to claim it. You cannot take your State Pension early.
Most employees are automatically enrolled in their employer’s pension scheme, although they can opt out if they wish.
You pay in tax efficient contributions.
You can access your savings from age 55 and take up to a quarter as a tax free lump sum. The remaining fund is designed to be taken as an income and is subject to tax.
There are two main types of pension, Defined Benefit (DB) and Defined Contribution (DC):
DB schemes pay out a secure income life that increases each year. The amount you get depends on your salary and how long you were a member of the scheme.
DC schemes do not promise a secure income. Instead you and your employer pay into a pension pot and this is invested. From age 55 you can access your pension pot or exchange it for a secure income.
Automatic enrolment makes it compulsory for employers to automatically enrol their eligible workers into a pension scheme. The employer must also pay money into the scheme.
Automatic enrolment was phased in from 2012, starting with the largest UK employers. All eligible workers should have been automatically enrolled in their employer’s workplace pension scheme by 1 February 2018.
PLEASE NOTE: If you are a member of the Investor Plan the information below is for you. If not in the Investor Plan the Money Advice Service has a useful Pension calculator.
How much you should put in depends on what you would like to take out at retirement.
You can set a target by visiting the ‘Pension Planner tool' and logging in.
When setting a target make sure you factor in pensions from previous jobs. You can also factor in the State Pension, which starts between 65 and 68 depending on your age. Get a State Pension forecast at www.gov.uk/check-state-pension.
Your employer may help build your pension pot in several ways:
- Employer contributions - With some schemes (for example Siemens Investor Plan) paying in more yourself increases the company contributions.
- Salary sacrifice - This means your own pension contributions are invested before tax and National Insurance are deducted.
- Pay the plan charges
PLEASE NOTE: The below information is only for Investor Plan members.
If you don't make a choice you will be invested into the default option. The is designed to suit a typical member, but it may not be right for you.
You should look at the funds available and choose one or a combination that meets your attitude to risk. You may wish to use any tools on offer or seek financial advice.
If you are an active member of the Investor Plan and you have a previous pension, you may be able to transfer in to your Siemens pension scheme.
You may want to transfer out of your Siemens pension scheme to another pension scheme of your choice. This means you will be giving up your Siemens scheme benefits.
You may wish to seek financial advice to make sure a transfer is in your best interests.
You may take benefits from age 55. The value of your account at retirement will depend on the contributions paid, the performance of the investments, any charges payable, and any cost of converting the benefit into an annuity.
Two reasons why retiring today is different to retiring in the past:
- You may choose to vary your income each year.
- The fund is likely to have to last longer.
Pension Freedoms have given people far more flexibility and choice with their retirement options.
The video below provides more information on your retirement options.
There are three main options at retirement:
✓ You don’t have to take benefits at your target retirement age.
✓ You don't have to stop work to take your benefits.
✓ You can use one option or a combination of options
✓ You can normally take up to 25% of the fund as a tax free cash lump sum
✓ You can estimate how long your fund will need to last using this tool.
✓ You have the option of transferring your pension to a new provider, but beware of pension scams.
The Trustee of the Plan and Siemens cannot advise you on what choices you should make, and we suggest you contact the Pension Wise guidance service and consider taking professional financial advice.
Pension Wise can be accessed online and over the telephone (0300 330 1001).