Not yet saving

Overview

A workplace pension is one of the most effective ways for you to save for retirement as both you and your employer typically pay in contributions to build up your pot.

Introduced in 2012, automatic enrolment required employers to set up a company pension scheme for their employees. Employers need to automatically enrol eligible employees and make contributions on their behalf. Even if you're not eligible for automatic enrolment you can still request to join your employer's scheme and if you pay in, your employer will normally contribute too.

What are the benefits?

There are a number of benefits to joining your workplace pension scheme:

Tax relief. To make saving into a pension more appealing, you may be entitled to tax relief at your highest rate.

In general, tax treatment depends on your individual circumstances and may be subject to change in the future. How much tax relief you receive may depend on which country you live in within the UK.

Employer contributions. Depending on how your scheme has been arranged, you may be able to build up your pot even more through the help of your employer's contributions. This lets you save more and potentially achieve a better income at retirement. Speak to your employer about what's available to you.

It can save you time. Your contribution will usually be deducted from your salary and we will invest the money on your behalf, meaning you don't have to arrange anything yourself.

It's out of temptation's way. The majority of people will only be able to access their pension pot from age 55. This means that  you can’t be tempted to dip in here and there.

Through your workplace pension scheme with Legal & General, you can register for Manage Your Account. This is our online service where you can monitor the performance of your pension pot at any time, explore and change where your pot is invested and update your details and preferences Log in or register now.

Why save now?

It's never too early to start saving for your future, and if you're starting to think about giving up work or phasing in your retirement, it's a good idea to save as much as you can comfortably afford.

Why saving is key to enjoying your retirement?

People are living longer. The Office for National Statistics figures suggest that a 65 year old today will on average live for another 20 years or more. This means that you may spend longer in retirement and may need a larger pension pot to help support you.

Our interactive Retirement planner can help give you an idea of what your pot may be worth at your expected retirement date based on current contributions, and what income that might provide you with. You can also see the effect of increasing your contributions.

Rising costs. There's no way of knowing how much things will cost in the future. The value of your money today can change over the years due to inflation. As a result, money today could be worth less in the future.

To try to counter the effects of inflation. It's useful to increase your contributions each year. This should help strengthen the value of your pension.

The sooner the better. The earlier you start adding to your pension, the more time your fund has the potential to grow but it could go down in value too.

A pension is a long-term savings plan and although you may not see the benefits immediately in your day-to-day life, saving via a pension can help ensure you have enough to live on in retirement.

Things to consider

Is a pension right for me?

For many people, joining a workplace pension is a good way of building up a pot of money to provide an income in retirement. You'll get tax relief on your contributions and your employer may pay in too, giving a significant boost to your savings.

However there may be times when paying into a pension may not be the best option. For instance if you have outstanding debts which need to be paid off or there are other financial priorities. Saving into a pension plan is not for everyone. Joining a plan may not be suitable for you, particularly if these savings could affect your entitlement to any means tested state benefits.

Your employer may also stop paying in to your pension if you stop, check with your employer.

Please note, you may have to pay tax when you take money out of your pension.

Do I have to join my workplace pension scheme?

Since 2012, employers have been required to automatically enrol their eligible employees into a workplace pension scheme. If and when you’re notified that you’ve been automatically enrolled, you can choose to opt out, but you may be missing out on benefits, such as contributions from your employer and tax relief.

Your employer is required to enrol you again every three years if you are still eligible and not currently a member of their pension scheme. You will have the right to opt out again.

PDF file: Being prepared PDF size: 271KB  

How do I join my workplace pension scheme?

If you are eligible, you'll be automatically enrolled into the pension scheme, and your contributions and your employer's contributions will be put into the default investment option. You’ll be able to move your money into the investment options of your choice once we have received your first contribution.

Once you've been enrolled you'll receive a notification explaining the pension scheme and your options to stay in or opt out.

If you’re automatically enrolled you can visit WorkSave Choice (subject to your scheme using Choice) to review your scheme and personal details or to opt out if you do not want to stay enrolled in your workplace pension scheme.

Even if you are not eligible to be automatically enrolled, you may still be able to join your workplace pension scheme. Talk to your employer about how you can join.

Why have I been enrolled into my workplace pension scheme again?

If you’ve previously opted out of the scheme, re-enrolment is an opportunity to start saving into your pension pot. Your employer is required to enrol you into the workplace pension scheme every three years if you’re still eligible and not currently a member of their pension scheme.

You have the right to opt out again within one month of being re-enrolled.

Will the State Pension be enough for me in retirement?

You become entitled to a Basic State Pension by paying National Insurance contributions during your working life. The more years you have paid National Insurance the larger your State Pension, with the maximum entitlement currently based on contributions of 30 years or more.

Like the name suggests, the Basic State Pension is unlikely to give you enough income to fulfil all your lifestyle wants and needs in retirement. In the current tax year (2018/2019), it only gives you £125.95 per week, or if you were born on or after 6 April 1951 (if male) or 6 April 1953 (if female) a new flat rate of £164.35 per week to live on (for tax year 2018/2019). And this amount could be even less if there have been any gaps in your National Insurance contributions record.

You might be able to get more but this will depend on your personal circumstances, for more information visit GOV.UK.

Find out more about State Pensions and see how much you'd be likely to receive from the state when you retire with a State Pension Forecast.

By joining your employer's pension scheme your income in retirement could be significantly more than if you just rely on the state as both you and your employer contribute.

How much can I save in my workplace pension?

You can contribute up to 100% of your relevant earnings or £3,600 gross, if greater, into your pension plan and still get tax relief.

If your contributions go over the annual allowance including employer contributions (currently £40,000 in the tax year 2018/2019) you will incur a tax charge up to the highest rate you pay.

For those with earnings over £110,000 a year, and £150,000 a year when total pension contributions are included, the annual allowance may reduce below £40,000 but not less than £10,000. Please note it may be possible to carry forward unused annual allowances from up to three previous tax years.

If you have started drawing a flexible income from your pension pot, your annual allowance will reduce to £4,000 a year (this is called the Money Purchase Annual Allowance (MPAA)) and you can't carry forward any unused allowances. If you want to carry on building up your pension pot this may influence when you start taking income. Taking your tax-free cash lump sum without any other income doesn't affect your annual allowance.

Can I transfer other pensions into my Legal & General plan?

Although your pension with Legal & General may accept transfers, we would always recommend you speak to a financial adviser before transferring any other pensions you have to us.

Your other pension providers may charge you if you transfer out of their plan and there may be other benefits or guarantees attached to your pension that you might forfeit if you decide to transfer it. If you are a member of a defined benefit scheme with a transfer value of more than £30,000, you will need to take advice before you can transfer it.

You can visit Unbiased to help you find a financial adviser in your local area. Advisers will usually charge a fee for their services. If you decide not to speak to a financial adviser, you can contact our Employee Support Team on 0345 070 8686 to discuss transfer options that may be open to you. We may record and monitor calls. Call charges will vary.

Can I cancel my plan?

If you have been automatically enrolled, you can opt out within one month and you’ll get your money back and be treated as if you never joined the plan. Your enrolment communications will explain how to do this. If you don’t opt out by this date you can stop contributing at any time. If you do this, both your contributions and any made by your employer up to that point will remain invested in your pension pot until you take your benefits.

If you have not been automatically enrolled, after you have joined the plan, we will send you a letter containing details of what you will need to do if you decide to cancel and ask for any money back that you have paid. The letter includes a form, called a ‘cancellation notice’. If you decide to cancel, you will need to complete this notice and post it back to us at the address shown on the notice within 30 days of receiving it.

After this period HMRC rules state that your money must remain invested in a pension scheme until you take benefits. For the vast majority of people this will mean that you won’t be able to take benefits until you have reached age 55.

Calculators and tools

Use our calculators and tools to find out what income you might need in retirement and whether you are on track.

Manage Your Account

Log in to Manage Your Account to take control of your pension account.