4 year glidepath:If your EasyBuild policy started before 6 April 2005 it will have been set up on a 4 year glidepath. This means that 4 years before you retire your funds will be moved annually into a cash fund.
5 year glidepath:If your EasyBuild policy started from 6 April 2005 to 31 January 2011 it will have been set up on a 5 year glidepath. This means that 5 years before you retire your funds will be moved annually into a cash fund.
Adventurous profileThis profile invests up to 100% in shares. It provides diversified exposure to UK and overseas equity markets. This is a higher risk fund aimed to maximise growth over the long term. The profile comes with a 15 year glidepath- please see glidepath for an explanation of this term.
Under HM Revenue & Customs (HMRC) rules there is a limit on the total amount you can save each tax year into all registered pension schemes and receive tax relief on your contributions. The maximum is 100% of your earnings (up to the annual allowance) or £3,600 gross, whichever is higher.
The annual allowance limit for the current tax year (2016/17) is £40,000. This limit includes all your contributions, tax relief and employer contributions across all your pension arrangements. If you go over this limit, this will result in a tax charge, known as the annual allowance charge.
The annual allowance will be reduced if:
- you take cash sums from your pension savings as Uncrystallised Funds Pension Lump Sum (UFPLS) or start taking an income from a flexi access drawdown. If you decide to do this, you’ll be subject to a reduced money purchase annual allowance of £10,000 for future savings made into a defined contribution pension, like The People’s Pension.
- you have a high income. This affects those with “adjusted income” (which includes the value of any pension savings made in the tax year) of over £150,000 and who have a “threshold income” (which excludes your pension savings) in excess of £110,000. If you have an adjusted income for a tax year of more than £150,000, then your annual allowance for that tax year will be reduced on a tapered basis.
This means, for every £2 of adjusted income above £150,000, your annual allowance will reduce by £1. The maximum reduction is £30,000, so anyone with an adjusted income of £210,000 or more will have an annual allowance of £10,000.
The rules around the tapered annual allowance are complex and so only a brief summary is provided here. If you’d like further information please visit HMRC’s website at: HMRC’s website at: https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm057100
AnnuityIs a policy that you buy with your pension fund, it provides you with an income for the rest of your life.
Automatic enrolmentAutomatic enrolment is the legislation introduced by the Government to encourage people to save more for their retirement. It means that from 2012 every employer will have to automatically enrol qualifying jobholders into a workplace pension.
B&CE Global Investments (up to 100% shares)This is an investment fund that aims provides diversified exposure to UK and overseas equity markets. The fund invests 50% in the UK stock market and 50% in overseas equity markets.
B&CE Global Investments (up to 60% shares) FundThe B&CE Global Investments (up to 60% shares) Fund is a medium to lower risk fund that invests in a combination of equities and bonds. The fund aims to produce moderate growth over the long term. It caters for members who are prepared to accept some degree of risk, but who look for investments which won’t go up or down a lot.
B&CE Global Investments (up to 85% shares) FundThe B&CE Global Investments (up to 85% shares) Fund is a medium risk fund and aims to combine the long-term growth potential offered through UK and Overseas equities together with the relative security provided by gilts, bonds and cash.
Balanced profileThis profile invests up to 85% in shares. The profile is medium risk and it aims to provide long term growth offered through UK and Overseas equities together with the relative security provided by gilts, bonds and cash. The profile comes with a 15 year glidepath- see glidepath for an explanation of this term.
Cautious profileThis profile invests up to 60% in shares. It is a medium to low risk option that invests in a combination of equities and bonds. The profile aims to produce moderate growth over the long term. It caters for members who are prepared to accept some degree of risk, but who look for investments that won’t go up or down a lot. This option comes with a 15 year glidepath- see glidepath for an explanation of this term.
For EasyBuild members: to change the amount you contribute you must download a payroll deduction form, fill it in and hand it to your employer and they will make the necessary change for you. If you currently pay via direct debit, call us and we can make the change for you over the phone or alternatively you can download a direct debit form fill it in and send it to us. You can find these forms in the library in document downloads.
For members of The People's Pension: you must contact your employer in order to change the amount you contribute.
ContributionsPayment(s) made into your pension by or on behalf of yourself.
Eligible JobholdersThese are workers who meet the criteria set by the Government to be automatically enrolled into a workplace pension. An Eligible Jobholder is at least 22 and under the State Pension Age, and earns more than £10,000 each year or £192 each week (tax year 2016/17).
Entitled WorkersThese are workers who do not need to be automatically enrolled but are entitled to join a pension scheme. They are aged at least 16 and under 75, they earn below the lower earnings level for qualifying earnings, currently £5,824 a year or £112 per week (tax year 2016/17). Entitled workers are not entitled to contributions from the employer.
GIGlobal Investment fund.
GlidepathThe glidepath is a way of safeguarding your money as you approach retirement. 15 years before your chosen retirement date your money will be moved annually into lower risk investment funds.
IllustrationA series of calculations, showing the pension income you might get at retirement based on a set of assumptions; not a prediction or promise.
If your employer is using The People’s Pension as their workplace pension scheme and you have not been automatically enrolled into The People’s Pension, you have the right to join.
To join, you must meet the following criteria: You're aged at least 16 and under 75 and you earn below £5,824 a year (which is equal to £112 per week). All figures quoted correct as at April 2016.
Lifetime allowanceThis is the amount that can be built up in all registered pension schemes that a person has, and which can benefit from tax relief. The allowance for the current tax year is £1m.
This stands for Lump Sum Retirement Benefit. Employers contributed to the cost of the Lump Sum Retirement Benefit Scheme through the stamping of holiday cards.
A Retirement Benefit Rate for each week of reckonable service is used to calculate the amount of lump sum benefit to which an individual is entitled on reaching their retirement date. With effect from 9 April 2001, no further weeks of service were added to the members Lump Sum Retirement Benefit (LSRB) Scheme. The fund remains invested in the LSRB Scheme until the member either transfers it to another pension arrangement or takes the fund at retirement (normally at age 65 years).
There is a minimum requirement of 80 weeks of service between April 1982 and the individual’s retirement date/ April 2001 to qualify for either a preserved benefit or a transfer value payable from this scheme. At the discretion of the Trustee, if less than 80 weeks in LSRB between April 1982 and April 2001-weeks of Accident and Life Cover (ALC) up to April 2006 if added to weeks in LSRB, may result in a payment.
NominationsThis is the person(s) you have nominated to receive your fund should you die before claiming.
Non Eligible JobholdersThese are workers who do not have to be automatically enrolled (although they can choose to opt into a qualifying pension scheme).
They are aged at least 16 and under 75, they earn above the lower earnings level for qualifying earnings (currently £5,824 each year or £112 per week) but below the earnings trigger for automatic enrolment (currently £10,000 each year or £192 per week). Or, they are aged at least 16 and under 22, or between the State Pension Age and under 75, and they earn above the earnings trigger for automatic enrolment, currently £10,000 each year or £192 per week (tax year 2016/17).
Non eligible workers may be entitled to receive contributions from their employer.
Under Automatic enrolment you have the right to 'opt in' to a pension scheme if you meet the following criteria:
- *You're at least 16 years old and under 75
- You earn more than £5,824 a year (equivalent monthly amount is £481 and weekly amount is £112) But you earn below £10,000 a year (equivalent monthly amount is £833 and weekly amount is £192)
- You're aged between 16 and 22, or between State Pension age and age 75
- You earn above £10,000 a year (equivalent monthly amount is £833 and weekly amount is £192)
In order to opt in you must either write to your employer or send them an email, which must include a statement confirming that you have personally sent it.
Under Automatic enrolment you can choose not to stay automatically enrolled in your workplace pension. This is called 'opting out'.
If you opt out in the first month from when you officially become a member of your workplace pension, any payments made into your pension pot during this time will be refunded. You can opt out after this time, but any contributions will remain invested.
Qualifying EarningsA band of earnings – between £5,824 and £43,000 for tax year 2016/17 (with proportionate amounts for periods of less than 12 months). The band is reviewed by the Government each year. Qualifying earnings include salary, wages, overtime, bonuses and commission, statutory sick pay, and any statutory pay received during paternity, maternity or any other kind of family leave.
Selected retirement age
This is the age at which you wish to access your pension savings.
For The People’s Pension, if you, or your employer, have not chosen a selected retirement age then we will normally use your state pension age (SPA). If your SPA includes a number of months, your selected retirement age will normally be your birthday before your SPA. For example, if your SPA is 66 and 3 months, your selected retirement age will be 66.
Self-Select:This option allows you to manage your own investments. You can invest in any mixture of the available investment funds, but this option does not provide you with a glidepath, so you will need to manage your own funds as you approach retirement.
State Pension AgeThe age at which you are entitled to start taking a state pension benefit.
For The People’s Pension, you can receive Tax Relief in two ways: (depending on whether your contributions are made before or after tax):
- If your employer takes your contributions before tax (known as a net pay arrangement), you only pay tax on what’s left. This means, you’ll get your full tax relief straightaway.
- If you don’t pay tax as your earnings are below the annual income tax personal allowance (£11,000 in the current tax year), you won’t be able to benefit from the tax relief or be able to claim any money back from HMRC.
If you make direct payments to us or your employer deducts your contributions after tax (this is known as relief at source), then we automatically claim tax relief for you, adding the basic tax rate of 20% to your contributions.
If you pay more than 20% tax, then you need to complete a tax return to claim back the extra tax relief from HMRC.
If you don’t pay tax as your earnings are below the annual income tax personal allowance you will still receive tax relief at the basic tax rate of 20% on the first £2,880 you pay into a pension each tax year.
Unit PriceThis is how much each single unit is worth at the date of transaction.
The People’s Pension, The EasyBuild Stakeholder Pension and The TUTMAN B&CE Contracted out Pension are unit linked schemes. Unit linked means the contributions we receive from you buy units in the investment funds we offer. The value of these units can go down or up depending on the way the investments are performing.
The Lump Sum Retirement Benefit (LSRB) Scheme and the Additional Voluntary Contribution (AVC) schemes are closed schemes and are not unit linked. The value of a benefit paid from the LSRB scheme depends on the number of weeks of service accrued and the retirement benefit rate applicable at the retirement date. The value of an AVC fund, depends on the contributions that were previously paid in and the annual bonuses that have been added.