Your annual pensions newsletter

[00:00:10.84] Hi, I'm Gemma Bryant. I'm passionate about pensions at Legal & General, and I'm thrilled to host this year's annual member forum brought to you by the trustees of the master trust and the independent governance committee, who are the independent bodies who check that your pension is run well and offers you good value.

[00:00:25.92] We're so pleased that so many of you can join us today. A very warm welcome to you all. Our theme today is simple moves for a stronger future. And we plan on making pensions easy. We're going to discuss all things pensions. You might be early on in your savings journey, but there are things you can do right now which could have a big impact on when you can retire and what your retirement might look like.

[00:00:45.84] We'll be sharing some simple tips and showing you what tools you can use to help you in your planning. It's never too early to plan for your future. This event will last 45 minutes, with a good amount of time set aside to answer your all important questions. Feel free to enter your questions in the chat at any time, and we'll answer as many as we can at the end.

[00:01:05.49] Just a heads up. This session is being recorded, and we'll send you the recording, along with a newsletter packed with useful information about your pension in the coming weeks. What you'll get out of this session today is a clear idea of the tools available to help you plan and keep track of your pension, top tips for what you can do right now that could have a big impact on what your retirement looks like. We'll be explaining how your pension works in our panel discussion, and we'll also be answering your questions live.

[00:01:30.61] We've got a packed agenda for today. First up, Nilly Özdemir will share her top tips for planning your future, and we'll show you some useful tools. Then we'll dive into a panel discussion with my special guests, Colin Clarke, Hemisha Malkan, and also Nilly to answer your questions. But first, let's hand it over to Nilly, who is going to kick us off with our top tips for how you can take action now to plan for a stronger future. Over to you, Nilly.

[00:01:53.21] Thank you very much, Gemma. Hello, everyone. My name is Nilly. I'm a member proposition director here at Legal & General, and I will quickly talk you through how you can access and use your mobile app.

[00:02:03.58] Now, if haven't registered for the mobile app or your online account before, you will need to be able to register. You can do that via your laptop or your PC or the mobile app, if that's your preference. In order to be able to register, you need your pension account number, which you can find in any of the communications we've sent to you before.

[00:02:21.34] Now, once you log in, you are able to set up your biometrics depending on your device type and again your preferences. And when you do log in, on the home screen, you will be able to access all your Legal & General products in one place, as well as having the ability to be able to connect to other pensions or your wider bank accounts.

[00:02:42.66] Now, this functionality is known as open finance. You don't have to do it, but if you wanted to, you can connect all your finances in one place and get that holistic view. When you do, you will be also provided with a spending and income analysis. You might be familiar with this from your own day-to-day banking apps. You'll be able to view all the categories of your spending, and you'll also be able to set yourselves spending budgets and/or saving goals as well.

[00:03:12.43] From a pension perspective, if I go back to the top of the screen and click on the Pension Overview page, on this page, you'll be able to get a valuation of your pension pot in a graph, and you can see how it's grown over time. If I scroll down a little bit lower, you'll be able to view your performance and how your pension has fared over the time.

[00:03:34.23] If you're interested in managing your investments, you can do so via the app as well so you can view where your money is currently invested. You can also change your investments depending on your preferences.

[00:03:47.19] If I again go back to the Pension Summary page, you'll be able to view your contributions. This is particularly important if you are actively contributing into your Legal & General pot. For those of you that are interested in consolidating pensions, you can also do that via the mobile app or your online account. We will discuss that a little bit more detail shortly as well.

[00:04:10.04] Now, as I scroll down, your Transactions page provides you with how much annual management charges and fund management charges that you've been paying. The Documents page is all of the documents that we have sent to you. So any communications will be saved in there for you.

[00:04:26.72] And as I scroll down a little bit more, you can also view and nominate your beneficiaries through the app. This is a really important part of keeping up with your pension. We will discuss that in a little bit more detail shortly as well, but if you haven't updated your beneficiaries, please do go on to your online account or the app and make sure that they are kept up to date.

[00:04:48.08] And lastly, from me today as I scroll down within the app, you'll be able to see that you can access your pension plan website through here for any of the information that is relevant to the pension plan that you are a part of and lastly, access our retirement planning tools.

[00:05:06.05] And on that point, just last month, we have introduced a new retirement planning tool, which we refer to as digital guidance. It's been designed to provide you with step-by-step guidance and planning in terms of your future. It will also give you actions to help you plan and get there. What we'll do now is we'll play you a quick video of it so you can get a feel for it.

[00:05:29.79] [VIDEO PLAYBACK]

[00:06:49.29] [END PLAYBACK]

[00:06:49.79] Thanks, Nilly, for walking us through that. It's great to see that come to life. You can download the app you see on screen now by scanning the QR code with your phone

[00:06:57.71] We're talking about pensions today, but we all have different financial priorities. So I'd like to ask you in our live poll, what is your number one financial priority at the moment? So we've got some options here, saving for a house deposit, paying off your mortgage, saving towards pensions, saving for a special occasion.

[00:07:16.95] Before we discuss results of the poll, let's go and meet all of our experts today. So our expert panel today is made up of Nilly Özdemir, who you've already met, Colin Clark, and Michelle Malkin. Thank you for joining me today. So Colin, starting with you, please could you introduce yourself and tell us a bit more about why do you-- sorry-- about what do you do. And I'm going to ask you to share personally why you think saving for a pension is so important.

[00:07:41.79] Thanks, Gemma. I'm Colin Clarke. I'm head of product policy strategy for Legal & General, and I lead on our pensions policy interactions with government, look at what's coming down the line for future policy changes, and advising the business. master trust trustees and our IGC on what's coming up.

[00:08:01.28] And saving into a pension for me is important is most people will get a state pension, but that's clearly not going to be enough to be able to give you a good lifestyle in retirement. So topping that up with a workplace pension is key for me.

[00:08:16.64] Thanks, Colin. Hemisha please, could I ask you to introduce yourself and share personally why you think saving for a pension is so important?

[00:08:24.04] Of course. I'm Hemisha Malkan, and I'm a DC strategies investment manager. For me, saving into a pension is very important because it gives you a smooth, stable retirement journey. It's also a very tax efficient way to save, and it's highly likely that your employer is contributing. So for me, it feels like a bit of a win-win.

[00:08:44.44] Your pot is then expected to grow in line with the assets that you're exposed to. And if you're contributing regularly, it's likely that you'll have a smoother journey as well.

[00:08:54.17] Thanks, Hemisha. Just waiting for some results to come in, guys. So what do we think we're going to be seeing here today? What's your views?

[00:09:03.53] I think most people will be saving for a special event of some sort, which is quite important. We are regularly being told that having an emergency fund is important to have in your account, isn't it?

[00:09:16.49] Thanks, Nilly. Well, here are the results actually, as we speak. So we've got just over 20% of people saving for a house deposit, 37% to paying off a mortgage, 33% saving towards their pension, which is great news, and just over 9% saving for a special occasion.

[00:09:34.45] Let's break that down a bit. So yeah, Nilly, we've talked about your views. So Colin, Hemisha, have you got anything you would want to add?

[00:09:41.15] Yeah. I mean, it's good that a lot of people are prioritising saving into a pension as well as some of the other financial needs for paying off mortgages and things like that. Obviously, getting your first home and saving for a house deposit is very important. So I think I'm not surprised by that, but it's good that people have got pensions in their mind, as well as all of the other things that are important.

[00:10:02.14] Absolutely. Thanks. Hemisha, have you got anything to add there?

[00:10:04.98] Yeah. For me, it's part of what I would think of as holistic wealth. So your pension is just another part of your savings journey and your wealth.

[00:10:13.98] Awesome. Thank you. OK, so now we're going to be exploring how pensions work and those top tips to help you thinking about your future. Firstly, I'd like to talk about the state pension. And I'm going to ask this one to you, Colin. Tell me what the state pension is, how much you'll get, and at which age you can get it.

[00:10:32.68] So the state pension is provided by the government. Most people will get one. Most people who are working will pay national insurance and the number of years that you've paid national insurance will all go towards working out how much state pension you get.

[00:10:50.16] To get anything at all, you've got to have a minimum of 10 years, and to get the full amount, which is about 230 pounds a week, then you need to have had 35 years of national insurance, which you get paid through your salary. If you've been out of work for a while, you can also top that up by getting credits. So if you've been out of work, on a career break, or if you've been a carer, you can actually add to that national insurance and boost your state pension.

[00:11:20.00] At the moment, state pension age is 66, but it is going up to 67 over the next couple of years. And it varies, depending on when you're born, so between 2026 and 2028. And then it's going up again to 68 in about 10 years after that.

[00:11:35.48] Wow. Thanks, Colin. That's really interesting, and it's good to know the facts around it. Nilly, I'd like to talk about the pension scheme our members watching are in. It's a private pension arranged through their place of work. Please talk us through the basics of how that works.

[00:11:49.11] Yes, of course. So mostly each month, members contribute a little bit into their pension from their salary, and so does their employer. Most employers tend to do a contribution matching or some sort of contributions into the employees pension on behalf of them. So these contributions are then invested in the hope that the savings will grow.

[00:12:11.25] With investments, I must let everybody-- reiterate with everybody that investments can go down as well as up. But the idea is that over the course of the time, that you are saving, it will hopefully go up.

[00:12:24.49] So once then you get to your retirement age, there are a few different ways for you to be able to access your pension pot. I'm going to cover that because I believe we are getting quite a lot of questions around that. So in the most simplest form, there are a few different ways for you to be able to access your pension pot when you get to your retirement age. One is via annuity.

[00:12:46.34] So annuity is essentially a guaranteed income for the rest of your life. You give your pension savings to an insurance company when you get to retirement age, and then they give you that money back over the course of however many long years it may can. You incorporate conditions within your annuity. The more conditions you incorporate within it, the less your regular annuity will be, because then the insurance company has to think about all of these other aspects and things that could happen.

[00:13:16.16] For example, one of the conditions is in the event of my death, I might want my annuity or part of my annuity to go to my dependents, for example. So that's annuity in the most simplest form.

[00:13:28.86] Another option is to be able to cash everything out. So you can come to L&G and ask to withdraw all of your money out all at once as a lump sum. So there are a few things to consider around this. When you do withdraw everything out all at once, you might end up paying a really large sum of tax, which some people don't tend to realise that that's the case. So that's a really big consideration to keep in mind.

[00:13:54.67] And lastly, you can access your money bit by bit. So as and when you need it, you might want to take a little bit here a little bit there, or you might want to come in every month and withdraw a certain amount of money from your pension pot.

[00:14:07.83] With each of these options, normally, the first 25% of your pension pot is tax free. The remaining 75% is taxed as income. So you just need to think about what's the best option for you.

[00:14:23.51] Just to confuse people a little bit more, you can also mix and match these different options as well. I would recommend anybody that is interested in learning more about the retirement options, if you go to your pension website and/or your online account-- and I've shown you earlier through the app that you are able to also access your pension website through the app-- there is a section that covers all of these options in detail and gives people education and guidance around what the next steps might be for them.

[00:14:52.84] Thanks, Nilly. That's really helpful to hear those options. I know that I've learned something there. So you mentioned that pension money is invested. So I'm going to pass the question over to Hemisha now. Hemisha, can you tell us what it means when we say that a member's money is invested? What are the investments? Do members have to choose where they're invested?

[00:15:11.64] So there are two options here. The first option is for members who wish to choose their own investments. And for these members, we have a wide range of options available. This is called the self-select fund range, is useful for members that do wish to take this option to get financial advice.

[00:15:28.96] The second option is called the default investment option, and this is for people that either don't want to pick their own investments or haven't engaged yet. For our members, this will be either the target date fund range or the lifetime advantage funds. These funds, they are invested, and they put your savings to work by putting the monies into different types of investments. This may be shares of companies.

[00:15:51.13] These investments are also then changed as a member approaches retirement to match the retirement option they might wish to choose. As Nilly referred to earlier, this would be cash annuity or drawdown. L&G, we monitor these investments, and we make sure they remain appropriate for a member throughout their entire journey.

[00:16:08.93] It is also important to remember, though, that investments can go down as well as up. And past performance is not an indication of future performance. However, the aim of our pension is to be invested for a long period of time with the aim for it to grow.

[00:16:23.29] Thanks, Hemisha. That's great. Colin, got another one for you. Please, can you tell us about how pension contributions work?

[00:16:30.66] Yes. So I think the biggest thing I think people need to remember around contributions is the benefit of getting tax relief from the government. So in exchange, if you like, for saving for your retirement and keeping your money in your pension until you're old enough to access it, there's an incentive from the government where you don't actually have to pay any tax on any of the contributions that you put in.

[00:16:57.26] So, for example, if you're a basic rate taxpayer and you want to invest 100 pounds a month, the basic rate of tax is 20%. So it only actually costs you 80 pounds and then the extra 20 pounds is topped up by the government. And if you're a higher rate taxpayer, then you get relief at your highest rate as well.

[00:17:18.14] You could also get a contribution from your employer as well. Most people in workplace pensions that are earning over a certain amount will qualify for a minimum employer contribution. But it's worth remembering that some employers might pay more than the minimum, so it would be worth asking your employer whether they do this, and they might match the amount that you're paying in.

[00:17:40.91] You can also change the amount that you're paying in whenever you like. You can pay in as much as your annual salary if you wanted to if you could afford it. And the other thing to remember is the importance of saving as much as you can as early as you can, because the earlier you start saving into a pension, the more time it has for the potential for it to grow.

[00:18:03.75] Absolutely. Thanks, Colin. You mentioned it's a good idea for members to think about how much they're saving. Nilly, can I ask you, how will our members know if they're on track? How can they check they're saving enough for retirement that they want? And how do they know how much is enough?

[00:18:20.15] That's a really fair question and one we get quite often as well. It's really hard for me to say a certain number because everybody's individual circumstances is very different. We all have different expectations in terms of lifestyle, and what we might think is the right amount of money.

[00:18:38.24] One thing that I would of urge everyone to think about-- and Colin referenced that earlier around affordability. So what's really important is to be able to save into your pension as much as you can comfortably afford to. That's a really, really important point to make.

[00:18:52.36] And in terms of how much you think you might need, we have tools to be able to support. So we've played the retirement calculator video earlier on. So essentially, that calculator, it will take you through step-by-step guidance on what your current savings look like, not just within L&G, but it will also have a look at your holistic savings everywhere.

[00:19:13.84] It will then tell you-- get you to think about your lifestyle and what you might want at retirement and at what age you might want to start accessing your money as well. It will then give you an idea around where you are currently, and then it will tell you the actions in terms of next steps, what can you do, what you can do to change those steps for yourself, depending on your targets that you've set in place.

[00:19:39.21] So for our members attending to the session today, I would just, again, remind them, just go on to the online tools, have a little play around with the calculator. And to be fair over, we've launched the calculator last month and over 35,000 people have already engaged with it. And we are seeing and getting really good feedback from it. So please go online and have a little play around, and that will tell you how much you might need.

[00:20:02.69] That's massive numbers. And I guess it also highlights if there's any gaps there and what our members can do to close those gaps down over time.

[00:20:08.48] Absolutely.

[00:20:08.83] Brilliant. Thanks, Nilly. Really helpful. OK, I'd like to cover our most asked question which members sent in to us now. And this one's for you again, Colin. Lots of our members have more than one pension pot that they are asking if consolidating their pots is a good idea. Please can you tell us all about consolidation? Is it a good idea? What should members be thinking about? And if this is the right for their individual circumstances, how can Legal & General help them consolidate their pension pots?

[00:20:33.36] That's a really good question. Consolidation is essentially bringing all of your pensions together in one place. And for a lot of people, that might be the right decision. It's easier to manage. You'd only be paying one set of fees. But it's a very personal choice.

[00:20:51.82] I mean, over time, people could potentially build up a lot of pension pots. The government average stats say that people might have 11 jobs during their working life. Each one of those will have a workplace pension. So it's worth thinking about the benefits of bringing those together.

[00:21:11.50] But as I said, it is a personal decision. There's lots of things that you need to think about before you make that choice. You need to think about how much you're paying for each of those pensions, whether you're going to end up in something that's slightly more expensive than what you're paying at the moment or whether it's cheaper.

[00:21:28.67] Think about the benefits that you've got in your different pensions as well. And are they providing the right solutions for you when you come to access your pot? Because not all pension schemes offer the same options. Look at the investment choice if you want to make your own investments but also consider whether you would actually lose any benefits.

[00:21:48.75] Older pensions, in particular, contain some guarantees. You might be entitled to more than the standard benefits, which you might lose those if you were to move a pension somewhere else. So it's important to think about those before you make a choice.

[00:22:03.03] L&G, we've got a service called MyFutureNow, which you can access online or through the app, and that's got helpful guides in there that go into a lot more detail about the things that you need to think about. And ultimately, if you do want to go ahead and consolidate your pot, MyFutureNow will do everything for you.

[00:22:19.72] Thanks, Colin. That's really helpful. Lots of considerations there for our members to think about. Nilly, some members are wondering what happens to their pension if they were to leave their employer. Could you explain what happens, please?

[00:22:30.82] Yes, of course. So in the event of you leaving your employer, the money stays as it is with L&G. So this is your pension. It doesn't go anywhere. The annual management charges and the fund management charges will carry on being withdrawn, but essentially, this is your money. So you can carry on keeping an eye on it via the app or your online account if you wanted to.

[00:22:51.04] For most of our members, if you wanted to, you can carry on contributing yourself into the Legal & General pot as well, but just remember, when you leave your employment, your employer contributions will stop, but you can carry on doing personal contributions if you wish to do so.

[00:23:07.36] Then, when you get to your retirement age, again, within the current rules that I've discussed earlier, you can access your money in a different ways. But essentially, this is your pot of money, and it stays with you. Just keep an eye on it. Just make sure you keep an eye on it.

[00:23:24.39] It's good to know. Thanks, Nilly. Hemisha, this one's for you. Some members have asked if their pension is invested sustainably. What can you tell me about this?

[00:23:32.69] Quite a popular question, actually. So sustainability and environmental, social, and governance factors are embedded throughout our investment process. Our investing policies are available online, and this includes policies on biodiversity, deforestation, climate change, controversial weapons, coal diversity, and engagement.

[00:23:54.57] The majority of our funds do apply minimum exclusions, and this includes companies that are perennial violators of the UN Global Compact. You can also read about our tilting methodology, which we call the future world methodology here and the climate impact page online as well.

[00:24:11.25] Awesome. Thanks, Hemisha. Another question for you, Hemisha. How can I check how well my investments have performed?

[00:24:18.02] If you log on online or through the app, you can click through and look how your investments have performed over different periods of time. This also gives you access to things like fact sheets, and that lets you see where your investments are invested as well.

[00:24:30.42] Thank you very much. I think we've got some live questions now coming through from our members. So I'm just going to pick up the iPad. For Colin, does the state pension go up with inflation or is it always what you retire with?

[00:24:42.34] That is a really good question. You might have heard this mentioned in the news quite a bit because it is quite a hot topic politically. Different governments and parties have different views on this. But a few years ago, the government introduced what's called the triple lock, which is where your state pension is guaranteed to go up every year by the highest of price inflation, wage inflation, or a minimum of 2.5%.

[00:25:11.28] So whichever of those is the highest in every year, that's what your state pension will go up with. And at the moment, that seems to be in place for a while. No plans to change that at the moment. So yeah, certainly, today, your state pension is guaranteed to go up every year.

[00:25:28.15] That's good news. Thank you. For Nilly then, when specifying beneficiaries, does the recipient have to be over 18 years of age or is there the option to set up a trust for someone under the age of 18?

[00:25:39.95] No, they don't have to be over the age of 18. You can put your beneficiaries as your children who are under the age of 18. That's absolutely fine. Just go back to the online accounts, there are options for you to provide as many beneficiaries as you need to really.

[00:25:57.85] So what we'll ask you is who those beneficiaries are, their name, date of birth, address. And we'll ask you what percent of your pension pot you'd like to go to that person. So as long as it adds up to 100%, then you can put as many people, and it can be children under the age of 18.

[00:26:14.12] For some people, they do prefer to set up a trust. If that's your preference, you can also do that. And there are ways in which that you are able to do it. We actually have articles on that one as well. If anybody needs any help around it, there are some articles online that you can get some help with it.

[00:26:30.96] Thanks, Nilly. That's really useful. One for you, Hemisha, what is the Islamic investment in our app? How is it different than others? Is it going to be too different to income with others?

[00:26:44.52] That's a good question. So we have recently launched what we call our shariah lifestyle. And there are also the funds that we use within our Shariah lifestyle available online as well. And this invests your income in line with Shariah law. So it won't breach anything as part of that. So therefore, you can invest where you wouldn't be able to before with respect to your religious beliefs.

[00:27:09.92] We've had quite a good uptake as well from what we've seen from our members. And in terms of will you see materially different returns or materially different outcomes, we do-- so our teams do design these funds as well.

[00:27:22.99] So we design them in line with our best philosophies. However, there are some constraints because we do have to keep investments that don't breach Shariah law. So there will be some differences, of course, but we do try to design these with the same philosophies in mind as we do our default investment options.

[00:27:40.09] Thanks, Hemisha. It's really helpful. Thank you. So we've got quite a lot of questions coming from members wondering what happens if their pension-- or what happens to their pension if they move overseas. Colin, could you answer this one for me, please?

[00:27:53.31] Yeah, sure.

[00:27:53.79] Thank you.

[00:27:54.37] So there's a couple of choices that you'll have if you are thinking of moving overseas or if you're there already. You could leave the pension where it is in the UK, and you'll be able to take the same options that you would do even if you were still within the UK. You potentially would have to pay tax depending on what options you choose. And you might also have to pay tax in the country that you're living in as well.

[00:28:20.58] But there are what our government calls double tax agreements with various different countries so that in theory, you should only end up paying tax once. So you would have to talk to ITM revenue and customs and the equivalent tax regulator in the country that you're living in to try and understand more about how that would actually work for you.

[00:28:43.38] The other option is if there are pension schemes in the country you're living in that can accept transfers from a UK pension scheme, you could possibly transfer it as well. But the same things you'd need to think about as if you were thinking of consolidating your pensions. You'd need to look at the options that are available, what you potentially be giving up, what you'd be paying in charges, and just weighing up those things. For some people, it might be best to leave it in the UK. For others, it might be best to transfer it. So yeah, different things to think about.

[00:29:13.41] Options, though. Options available. Thanks, Colin. Hemisha, one for you. Members have asked, how can I choose my own investment, and how can I work out what the right investment for me is?

[00:29:23.63] So you can choose your investments online or by logging into the app. Here you'll see the list of investments I mentioned earlier, the Self-Select Fund range, and you can click through. It's quite easy to pick whichever one you want.

[00:29:35.19] However, what's right for one member might not be right for another. So this is where financial advice is very important if you do wish to pick your own investments. We also have the default investment option that I've mentioned a couple of times now for members either not wanting to pick their own investments or those not engaging as much.

[00:29:51.27] I also want to mention here that if you do not select a retirement age, the app or the online, it will automatically select 65. So if you do wish to retire at a different age, it's important to log on and make this change, as this could impact where you're invested.

[00:30:06.28] Of course. Thank you, Hemisha. Good words of advice there. So we've got a question for Nilly now. Is there any way in which money can be withdrawn from your pension pot earlier than your retirement date?

[00:30:19.88] So technically, no, there aren't. Colin referenced the state pension age earlier on. The age for you to be able to access your private pensions, as in the Legal & General holdings that you've got in here, the earliest currently is 55, but that age is going up to 57 in 2028. So that's the earliest you will be able to access your pension pot.

[00:30:44.86] We do hear some people being promised these type of things. So if something sounds too good to be true, it often is. So please make sure that you check things before you believe in these kind of things. It can be a scam, so just please be careful on that one.

[00:30:59.08] The only circumstance where you might be able to access your pension pot earlier than those ages that I've referenced is if you are in serious ill health. If that's the case, then please do get in touch with us, then we will talk you through your options. But as a short answer, no, you can't access your pension pot any earlier than the regulations and the rules allow you to.

[00:31:21.21] Thank you. It's really clear. Thank you. One for Colin. How can you find your old pensions from previous jobs?

[00:31:31.25] That is a really good question. If you haven't got any paperwork, the best place to go to is the government's pension tracing service. So they've got records of contact details of all workplace pensions by your employer and what provider they're currently with. So I would recommend going to that tracing service first and seeing if you can find anything on there.

[00:32:01.17] Thanks, Colin. Helpful. Hemisha, one of our members has written, "Silly question. If you stop putting into your workplace pension, would it still grow over the next 11 years?"

[00:32:11.55] There's no such thing as a silly question. So if you do stop putting into your pension, that means that you won't have regular contributions coming in, but the amount that you have already there will remain invested. We don't move it without your consent, so this will still remain invested.

[00:32:26.11] If you're invested in our default option, then any changes we make to that will also be made to you. You'll benefit from any changes we make from that as well. So no, you will not stop making any form of returns, but it just means that you won't get the benefits of contributions.

[00:32:43.59] Thanks, Hemisha. For Nilly, "Do we also offer financial advice or do we have partners that we work with to offer this service?"

[00:32:52.39] Yes, we do have a Legal & General financial advice service that's available. What we find is some of our clients offer a different service to their members. So the best way for you to check whether if you have Legal & General financial advice or something else that's been arranged for you on behalf of you by your employer is to go online to your online account or the app. Your pension website will give you information relating to this. But short answer is yes, we offer a financial advice. You just need to check which one that you are eligible to.

[00:33:26.36] That's great. Thanks, Nilly. We've got one here for Colin. "At what age will I personally be able to access my state pension versus my Legal & General pension?"

[00:33:38.16] That is also a very good question. The government, as a general principle, wants to keep the age that you can access a private pension usually 10 years before state pension age. So although the state pension age is 66 at the moment, it did used to be 65. So the age that you can access your private pension is currently 55, so 10 years before.

[00:34:03.37] I mentioned earlier that the state pension age is going up to 67 starting from 2026 to 2028, depending on when you were born. So in 2028, in April 2028, the minimum age for when you can access your private pension is going to go up to 57. And that will generally apply to most people. But some people might be in schemes that have got what's called a protected retirement age, which might allow you to take the money before the standard normal age of 57. And that could be from older jobs. The age used to be 50. Certain professions used to be able to take their money before 50 as well.

[00:34:44.57] So if you're in one of those schemes, you might be able to take it earlier than that, but as a general rule, it will usually follow 10 years before the state pension age.

[00:34:54.41] Useful to know. Thanks, Colin. Another one for you, Colin. You're very popular today. "If you have several pension pots, do I have to take all the 25% lump sum from all pension pots, or can I select the individual pots and take out 25% from one or two only?"

[00:35:12.34] So the 25% applies to each scheme on its own. So every pension scheme that you have, you can usually only take up to a maximum of 25% from each. So you couldn't look at your overall total, 25% for all of your pensions, and decide to take all of that from one of them. So you are limited to 25% from each.

[00:35:35.30] And there is what's called the lump sum allowance, which is the maximum amount that you're allowed to take tax free from all of your pensions. It's just over 268,000 pounds. So it's fairly generous, but I think the important thing to remember is you can't combine all of those and take it from one pension scheme. Each pension scheme has 25% on its own.

[00:35:57.19] Thanks, Colin. That's really helpful. One for Nilly now. "Can I change my retirement age?"

[00:36:02.83] Yes, you can. As Hemisha mentioned earlier, if you haven't updated your retirement age before, in most of the cases, your retirement age will be set to 65. That's just the default age that we will often set you in. And if you wanted to change that, if you want to retire earlier or later-- although we don't tend to see many people wanting to retire later than that-- you will be able to do that via your online account. I'll just recommend just go online and change it as it suits your needs.

[00:36:32.79] Can we do that through the app?

[00:36:34.39] Not currently, but you'll be able to do it very soon. That's one of the developments that are coming down the line.

[00:36:39.33] Excellent. Good to hear. Thanks, Nilly. For Colin, "Can you take a pension and continue to work?"

[00:36:46.71] Yes. Generally, you can. I mean, there might be some schemes that say that you have to have actually stopped working to be able to take your pension, but mostly, you don't actually have to stop working before you can access your pot. So some people use that as part of their planning to ease into retirement. So you might want to reduce your hours and supplement your income through accessing your private pension. So you don't actually have to start working.

[00:37:14.24] But as I say, some schemes might say that you can't do that until you've actually stopped working for that particular employer, but generally it's fine. And state pension as well. You can actually start drawing your state pension if you're still working as well.

[00:37:27.04] That's good to know. Thanks, Colin. So another one for you, Colin. Staying with you. "Does state pension justice appear if you don't make it to retirement age, for example, if you're in ill health?"

[00:37:41.04] A short answer to that is yes. Yes. I mean, there isn't a pot of money for the state pension, so it's not like a private pension. Whereas if you were to pass away before accessing your private pension, whatever is left in the pot would be available to pay to your beneficiaries.

[00:37:59.13] The state pension doesn't have a pot of money available. It's paid out of people that are working today. So it's what's called an unfunded pension. So the money that working people are paying in national insurance is paying the pensioners that are getting their state pension. So if you were to unfortunately die before you got to state pension age, then you wouldn't actually get anything from it.

[00:38:23.01] Thank you. It's good to know. For Nilly. "What is the difference between defined contribution and defined benefit pensions?"

[00:38:31.51] No problem. So defined contribution pension is what most people will have nowadays, and that is what we've been referring to the private pension. That's what we've been referring to as well. So with defined contribution pension, you contribute, your employer contributes. That money is invested with the aim to help it grow, and then you can access it when you get to your retirement age.

[00:38:53.46] So essentially, you know how much you put in, you know your employer puts in, but you don't know how much money you're going to have at the end of it with a defined contribution pension, because it depends on the investment performance and how long you've been contributing for how much for that sort of thing.

[00:39:07.74] With a defined benefit pension, which is not very common nowadays, actually, it used to be more popular back the day, what a defined benefit pension is you don't necessarily know how much money that is going into it, but you know how much money you are going to get out of it. That's the kind of simplest way to be able to explain the differentiation between them.

[00:39:30.82] I think most people, if you have a defined benefit pension, you will know about it, and you will get annual benefit statements from it as well. And it often tells you how much money you will have at the end of it. So it's slightly different.

[00:39:43.58] Thank you. That's great. Staying with you, Nilly. "What would you recommend for someone just starting their career and looking for pension advice?"

[00:39:52.99] Oh, so that's a very good question and a very broad one as well. So I guess as I mentioned earlier, if you're new to it and you're just starting out-- I appreciate we have loads of different competing priorities. People want to buy a house, as we've seen from the poll earlier. There's so many things to try and save for. I think earlier on in your career, it's really important to just save as much as possible that you can comfortably afford to. That's the key, I think, to start with.

[00:40:23.43] Thanks, Nilly. That's great. So that's the end of our questions. So I'd just like to say before the event ends, we would love to receive your feedback on what you thought of today. Any moment now, you should see a short poll to enter your feedback, and we'd be so grateful for your time in taking a moment to let us know your thoughts.

[00:40:40.55] That's all we have time for today. I'd just like to remind you about some of our top tips for a stronger future, which we've discussed today already. Get online and download the app to check how much you've got saved already. Complete a retirement plan using the retirement planner, which can help show if you're on track for retirement you want. If you have more than one pension pot, think about whether consolidating them is right for you.

[00:41:02.72] We will share the recording and the newsletter with useful tips in the coming weeks, so please look out for that. And remember to download the new L&G app if you haven't already.

[00:41:11.44] Thank you so much for my brilliant expert panel for joining me today. And most of all, thank you to all of you for watching our event and for asking so many great questions. If your question wasn't answered today, you can log into the app or your online account to get some help there.

[00:41:25.12] We hope you've come away with some great tips for a stronger future, and we hope to see you here again soon. Goodbye.

 

[00:00:08.80] Hi, I'm Sean Phillip. I'm a pension specialist at L&G, and I'm thrilled to host this year's annual member forum brought to you by the trustees of the master trust and the independent governance committee, who are the independent bodies who check that your pension is run well and offers you great value. We're delighted to have so many of you join us today. A very warm welcome.

[00:00:29.28] Our theme is simple steps to strengthen your pension, and we're all about making pensions easy. We're going to discuss all things pensions and letting you know about things you can do right now, which could have a big impact on what your retirement might look like. We'll be sharing some simple tips and showing you what tools you can use to help in your planning.

[00:00:47.56] The event will last 45 minutes with a good amount of time set aside to answer your all important questions. You can enter a question into the chat function at any time, and we'll get to as many of your questions as we can at the end. Just as a reminder, this session is being recorded, and we'll be sending you the recording with a newsletter packed with useful information about your pension in the coming weeks.

[00:01:08.50] What you'll get out of this session today is a clear idea of the tools available to help you plan, top tips for what you can do right now to strengthen your pension and have the retirement you want, and we'll go into the detail of how your pension works and cover everything from contributions, whether consolidating your pension pots is right for you? Tax on your pension, and your options for taking your pension. And, of course, we'll be answering your questions live.

[00:01:33.94] We have a packed agenda for you today. First up, we have Nilly Özdemir, who will talk you through some of the really useful tools available to help you plan for your future. Then you'll be hearing from my colleague Andy Hope, who will walk you through how your pension works, things to think about, and how to plan. Then I'll be joined by my special guest, Colin Clarke and Hemisha Malkan to answer your questions. But I'm going to hand over to Neely first, who will introduce some incredibly useful tools to help you plan for your future.

[00:02:04.79] Thank you very much, Sean. Hi, everyone. I'm Nilly. I'm a member proposition director at L&G, and today I will be talking you through our mobile app. So first things first, if you haven't registered for your online account, you will need to register in order to be able to access the app. But the good news is you can do that via the app or your laptop or PC.

[00:02:24.75] In order to be able to register for an online account, you need your pension account number, which you can find on any of the documents or communications that we have previously sent to you. Now, once you register yourself and you log in, depending on your device type, you can set your preferences in terms of your biometrics. So this could be face recognition or thumbprint or PIN number, depending on, as I say, your preferences and your device.

[00:02:53.35] When you first log into the app, you will be greeted by the home page, and on this home page, you'll be able to see all your legal and general products in one place. One of the capabilities of our mobile app is the ability to be able to connect to other pensions or bank accounts you might have. This is known as open finance. Now, this is completely optional. You don't have to do it. But we find some of our members who'd like to connect to other accounts. They have to be able to view everything in one place.

[00:03:24.89] Once you've done that, you are then able to view things like spending and income analysis. So it will tell you where you're spending your money and what your income is. You'll also be able to view details around your spending categories as well. You might be familiar with this type of technology from any other banking apps that you are currently using, so this is completely optional. If you wanted to take advantage of it, you can.

[00:03:49.41] Another thing is, once you've connected to the open finance, you can also set yourself spending budgets and/or saving goals. Now going to the actual pension overview page of the app, when you click on the pension overview link, you will be able to access the workplace pension environment. On here, we have our graph, which has been recently delivered because this was the most wished for feature from our members. So you can view how your pension pot value is grown over time.

[00:04:22.63] You can access the fund performance through here in terms of your investment performance. If I scroll down a little bit more lower, your investment sections. You will be able to see where your money is invested. And those of you who are interested in making a self selection, you can also browse any of the funds that are available to you if you scroll down in here, and you can view your performance as well.

[00:04:47.63] If I again go back to the home page, this is the Pension Summary page. As I scroll down, just underneath investments, you'll be able to view your contributions. So this is more important, I guess, for members who are regularly contributing into their pension. And this link in here will allow you to be able to consolidate your pensions in one place. My colleagues will talk about the pension consolidation and how that works shortly. So I won't go into too much detail on this one just yet.

[00:05:17.77] If I scroll down a little bit lower, again, your Transactions page allows you to see how many contributions and how much contributions are coming into your pension, as well as the annual management charges and the fund management charges that are applicable to your personal account. Your Document section, you'll be able to see all of the previous communications that we have sent to you. So it's all kept safely in there for you.

[00:05:43.85] This link in here, nomination of beneficiaries is really important. So on this link, you can see who you've nominated already. If you haven't made a selection, please do make sure that you update your online account and tell us who you'd like your nomination of beneficiaries to be. This tells us in the event of your unfortunate death, who should be paid the pension monies to.

[00:06:09.06] Going back again on to the Pension Overview page, you can access transfer in and link through here again. And you can access your pension website through here as well. There will be a pension website available for you depending on which pension scheme that you are in. And within this website, we hold all of the important information and pension education type of content for you.

[00:06:33.34] And lastly from me today is the retirement planning tools. Through the mobile app and in your online account, you can access our retirement planning tools. And on that kind of content, we have developed a digital guidance tool to help you better plan for your future and for your retirement.

[00:06:52.24] Through this tool, you will be able to go through step by step in terms of how much money that you have got within your legal and general savings. You'll be able to pull in, for calculation purposes, any other savings that you have elsewhere. This time will give you an idea of how much you have realistically saved.

[00:07:10.72] The calculator will then talk you through lifestyle planning, your options at retirement, how taxation works, and right at the very end, it will tell if you have any shortfalls in your planning. If so, what you can do to cover those shortfalls. It's a really valuable tool, and I would recommend that you all have a little play around with it. Now, on that subject, I will play you a little video now, and then we'll go on to our panel to have a little discussion.

[00:07:37.30] [MUSIC PLAYING]

[00:07:40.44] I've always tried to do the right thing, be sensible with my spending and save for the future, but I've never been a great planner. When it comes to retirement, it just seems complicated, and retirement has always seemed a long way away. But I've just turned 60, and our mortgage is going to be paid off soon. That made me think about how retirement is going to look. What sort of life I'm going to lead, and how much I'll need to really enjoy it?

[00:08:08.66] For years, I just put my pension statements in a drawer, but I thought I should actually check up on it all. So I downloaded the L&G app. It was so quick to set up, and now it's so much easier to keep track of all my pension pots. Now, I'm on a bit of a roll with the app. It's got a retirement guidance planner, too.

[00:08:30.46] It looked at the value of my pension pots, at my savings and investments, and even my property. The planner made it easy to get a full view of what my savings could do for me. I tried to see if I could maybe retire when I'm 62. The planner pointed out that my state pension and old company pension don't start paying until I'm 67, so if I did retire at 62, I'd be drawing on my other savings, and I'd risk running out of money later on. That's something I really don't want to happen.

[00:09:08.07] But the planner showed me another way forward. It helped me realise that part time work could be a great way for me to free up my time just now, while making sure that I've still got enough money for later on. I've now got a nice concrete plan. I know exactly what I'm going to do and when I'm going to do it to get of retirement I've been looking forward to for a long time.

[00:09:31.39] I've always been good at sticking to budgets, so I know that it will work. And if I've got any questions the virtual assistant can't answer, I can just call L&G's retirement helpdesk or chat with them through their web chat. So I feel in control. I'm making the best decisions for me. And I know where to go with any questions I have, which is all very reassuring.

[00:09:52.38] [MUSIC PLAYING]

[00:09:58.45] Thank you Nilly for joining us and for that fantastic walkthrough of our new L&G' app We're also really proud of our retirement planner, and you can see how useful it is to have access to online tools like these to help me better understand your retirement savings and plan for the future all in one place. You can download the app by scanning the QR code on screen with your phone.

[00:10:20.37] Now, I am delighted to introduce Andy Hope, who will run through some of the key things to know about your pension, covering everything from how it works to what steps you can take right now to strengthen your pension. Andy, over to you. Please could you introduce yourself and explain why you're passionate about helping members get the retirement they want.

[00:10:39.65] Thanks, Sean. Hi, everyone. I'm Andy Hope, and I'm a pension specialist at legal and general. So as Sean said, I'm going to give you an overview about how your pension works, how to plan, and where you can get more information about your pension. So I'm going to start with some important information. This is a general education presentation and doesn't represent financial advice. And it's going to be based on the current tax year. The value of your investments can go up or down as well as up, and it isn't guaranteed.

[00:11:06.75] So first of all, how does your pension work? Well, it's a defined contribution scheme where you build up your pension pot. You don't usually pay tax on your pension contributions, so it's a tax efficient way to save. You can pay into your pension, but crucially, so does your employer.

[00:11:22.71] You can also choose where your pension savings are invested, but don't worry, if you don't make a choice, they'll be invested into your plan's default strategy. If you no longer work for your employer, don't worry, your savings aren't lost. Your pension savings will remain invested in the same funds with legal in general unless you choose to transfer to another provider.

[00:11:42.89] Your savings can be passed on to your loved ones if there's money in your pension pot when you die. But you should make sure, as Nilly said, that you nominate your beneficiaries so we know who to pay your savings to.

[00:11:54.85] For some of you, retirement may feel a long way off. But whatever your age, saving for retirement is important. And, in fact, the earlier you can pay into your pension, the better. Your L&G pension will provide you with a source of income that can help replace your salary when you want to slow down or stop working altogether. In other words, being paid not to work, which sounds quite exciting.

[00:12:17.81] There isn't a one-size-fits all to the question of how much should you be saving. And ideally, you should contribute as much as you can sensibly afford. We have a range of planning tools that can help you work out how much you might need to support your future lifestyle.

[00:12:32.01] Some things for you to think about. Review what you're currently paying in to know how much you're saving for retirement, crucially check that you're making the most of your employer's contribution structure. Often, your employer may increase what they will pay in if you contribute more yourself. You should think about increasing the amount you can contribute and potentially look at savings in other areas that could help. Even small amounts can make a huge difference over a longer time period.

[00:13:00.06] You could consider paying in some or all of your annual bonus, which can be a really tax efficient way to save. You can set up an annual review in your calendar. Having a regular review will help you understand whether your plans are on track. And Alice Nilly talked about our guided retirement planner can help you see if you're on track to have the income you're looking for at retirement. You can access this via the app or via your online account, and the planner can help you check whether you're on track to achieve your goals.

[00:13:27.62] Just a couple of quick points about tax relief. You can normally pay the equivalent of your annual salary into your company pension plan each year and still get tax relief. However, there is an annual allowance, and if you go beyond this, you may incur a tax penalty. The standard annual allowance is 60,000 pounds per year. If you start to take your money flexibly, the amount you can contribute into your DC pension and still get tax relief may reduce to 10,000 pounds a year.

[00:13:56.24] So it's important to start thinking about the type of retirement you may want. And with that in mind, let's look at some of the things to consider and how to keep your plans on track. If you haven't already, it may be time to ask yourself three really important questions-- when are you planning on retiring? Do you want to retire soon? Are you not thinking about retiring for another 10 or 20 years? How do you want to spend your time in retirement? Are you thinking about travelling the world, looking forward to focusing on your hobbies or enjoying a slower pace of life? Will you have enough retirement income to support your plans? Again, are you on track for the income you'll need to support your future lifestyle?

[00:14:34.36] To help with the third question, the pensions UK created retirement living standards to help pension savers visualise how much they may need to support three different lifestyles in retirement. Highlighting the amounts required for a single person or two people, as well as showing an additional figure for London-based residents who typically have higher costs.

[00:14:54.66] So the first example is the minimum category, and this is defined as having all your needs met with some left over for fun. And this has been set at 13,400 pounds. For a moderate retirement category, this is defined as having more financial security and flexibility and has been set at 31,000 pounds.

[00:15:14.82] For a comfortable retirement, this is defined as having more financial freedom and some luxuries and has been set at 43,900 pounds. To find more about the retirement living standards, go to the pensions UK website, which you can access by scanning the QR code on the slide.

[00:15:33.43] So coming on to the state pension, the state pension is currently just under 12,000 pounds per year. But to receive the full state pension, you need 35 years of qualifying national insurance contributions. And it's a really valuable benefit. And even if you qualify for the full state pension, this will be less than the amount required to support the pensions UK's minimum lifestyle in retirement. It will fall some way short of the amounts required to support a moderate or comfortable lifestyle, and, as you can see, the savings in your workplace pension could provide you with an important source of additional income to support your preferred lifestyle in later life.

[00:16:11.35] So, in summary, it's important to stay on top of your retirement plans, and there are several practical steps you can take, including, again, using our guided retirement planner to check if you're on track to achieve your goals, contributing as much as you can sensibly afford. If you have a partner, talk about pension planning with them and make sure you're on the same page. And finally, obtain a state pension forecast for yourself and your partner if possible.

[00:16:37.29] So, as a member of the workplace pension, you have the flexibility to choose how to take your money at retirement. We're going to look at those options in a bit more detail shortly. But before we start, if you're age 50 or above, it's a great idea to take the free guidance that's available from pension wise to ensure you understand the available options and the tax implications.

[00:16:56.97] So firstly, let's touch on when you can take your money. The earliest you can currently access your pension savings is from the age of 55. You may be able to access your pension savings earlier than this. And if you have an illness, that means you're unable to work in the future, or if you have a protected retirement age. It's also worth noting the government is increasing the minimum pension age to 57 from April 2028.

[00:17:20.49] So how can you take your money? The really exciting bit. You can take your money in different ways, and you can choose the option or combination of options that suits your circumstances. When you access your pension, you usually take up to 25% of it as a tax free lump sum. The remaining 75%, however you choose to take it, will be taxed as earned income. The amount of tax you actually pay will depend on your earnings. The money you take from your pension may affect your income-related state benefits you receive.

[00:17:51.11] So the first main option, you can take all of your pension pot as cash all in one go. But you really need to think carefully before you do this. It could result in a large amount of tax being deducted before we pay you. You can take cash from your pot in smaller sums. Normally, the first 25% would be tax free and the rest would be subject to income tax. This may allow you to access your money more tax efficiently. What remains in your pot while it's still invested, and the value of investments may go down as well as up.

[00:18:23.23] You can use income drawdown. The first 25%, again, can normally be taken as tax free cash subject to any allowances, and the 75% you can take as needed. You can change, stop, or suspend the amount you're taking at any time. Your fund has the chance to grow, but it could go down in value. If you take too much out of your investment and your investments don't perform as well as you would expect, you could run out of money before you die. Your remaining drawdown pension can be inherited by your chosen beneficiaries tax free before 75.

[00:18:58.57] And finally, you could use your pension pot to buy a guaranteed income through the purchase of an annuity. An annuity gives you a guaranteed amount of money payable for either a fixed term or for the rest of your life. There are different types available, which will typically be bought from an insurance company, but it's really important to shop around to find a provider and a deal that suits you. If you have certain medical conditions or lifestyle factors, such as smoking or high blood pressure, you might qualify for better rates.

[00:19:27.18] You can also choose some guarantees to protect some of your money if you were to pass away. You don't have to choose just one option or one provider, you can choose different options for each pension pot you have. There is a lot to consider when you're thinking about which retirement option is right for you. And if you decide to take an annuity, then you wouldn't have the same flexibility as drawdown. But drawdown isn't guaranteed in the same way as an annuity.

[00:19:50.86] But overall, it's worth taking stock of all of your options. And if you have a partner, then you'll also want to think about what happens to your pension benefits if you were to pass away, as there will be different for each retirement option.

[00:20:02.70] And finally, in terms of tax, we've created a pension tax calculator that can help you work out how much tax you might have to pay when you start to access your pension savings. Again, you can scan the QR code to find out more.

[00:20:17.26] So you may have lots of other pensions and want to know that if you can transfer them into your employer's pension scheme. There are a number of steps you can take to track down any old pensions that you may have lost track of. Firstly, contact the pension provider. So if you had a personal pension, then try contacting the company that you paid your contributions to.

[00:20:36.28] Secondly, contact your previous employer. If it is a workplace pension, they may be able to point you in the right direction, or finally, use the pension tracing service. If you can't find your previous employer, perhaps the company is no longer trading. You could try the government's free pension tracing service to help track down those lost pensions.

[00:20:56.60] There are lots of reasons why you might want to transfer an old pension to a different provider. You may want to make it easier to manage your pension savings by having them all in one place. You may want to start by comparing the charges and available options to see whether a transfer would be beneficial. You should also check if there are any penalties for transferring out or whether you would lose any guarantees or special features.

[00:21:18.16] It's also really important to be aware of pension scams, and you can find out how to spot, avoid, and report pension scams on the moneyhelper website. You may want to seek financial advice, and you can access this through legal and general's independent financial advisors or find an advisor in your local area via unbiased.co.uk. Although you should note that advisors do normally charge for their services.

[00:21:42.34] Legal and general makes available My Future Now, and it's a pension transfer service that you can access through your online account. It's a really simple way to combine all your pension pots in one place. And for more information about this free service, see the guide to pension transfers in your online account. That's [INAUDIBLE].

[00:22:00.86] Brilliant. Thanks so much, Andy. That was really insightful, and I'm sure it's going to be really useful to all our members watching today. I'm definitely going to watch that back to make sure I pick up on everything you talked through. Now, we would love to hear your views. So in just a moment, you will see a quick poll pop up on your screen. You heard Andy talk through what your options are at retirement. The question is, how will you take your pension when you reach retirement?

[00:22:27.07] So will you take it as a guaranteed income or otherwise known as an annuity? Will you take a regular income from your pension pot drawdown, or you take it all your pot as a cash lump sum, or are you undecided? And while we wait for the results of the poll to come through, I'm just going to take this moment to introduce our expert panel who will be answering your questions today.

[00:22:47.35] You've met Andy already. So I'd like to ask Colin and Hamish to introduce themselves. Colin, starting with you, please, could you introduce yourself and tell us more about what you do? And I'm going to ask you to share personally why you think it's so important for people to pay attention to their pension.

[00:23:03.53] Thanks, Sean. I'm Colin Clarke. I'm Head of Product Policy Strategy for the workplace savings business at L&G, and I lead on our interactions with government, looking at policy developments and advising the business, the [INAUDIBLE] trustees, and our L&G on what's coming up for pensions policy perspective. What's really important for me-- Andy covered it very well in one of his slides around the state pension and whether that would be enough, and the figures show clearly it won't. So it's very important for me that I top up the state pension with private savings into the workplace pension.

[00:23:37.49] Brilliant. Thanks so much for that, Colin. Hemisha, please could I ask you to introduce yourself and share why you think saving into a pension is so important?

[00:23:46.49] Of course, I'm Hemisha Malkan, and I'm a DC strategies investment manager, and I work in the team that manages the default investment options you have. For me, saving into a pension is super important because it allows our members to have a smooth, stable retirement income.

[00:24:02.13] It also means that, as Andy already took you through, it's a very tax efficient way of saving, and at the same time, your moneys remain invested. So this could mean that you could potentially have the benefits of having the investment growth cried. Regular contributions also help create a smoother journey.

[00:24:21.43] Brilliant Thanks so much for that. It's great to have you here. Right before we go into our QA, we've got the results of the poll that are just coming through to me by the wonders of technology through the iPad. So what have we got here? We've got-- how will you take your pension when you reach retirement?

[00:24:37.53] So 12.5% of people have said a guaranteed income, 40.9, very specific there. 40.9% of people say that they will take a regular income from their pension pot drawdown. 1.7%, I think, they're going to take it all as a cash lump sum, and 44.8% are undecided. So, yeah, I mean, I suppose that just shows that the value of this session today and giving people a bit more information about the different options that are available to them.

[00:25:08.39] Right. Now, it's time for some questions. Our first question is one for you, Colin. We've had some members who plan to move overseas in the future-- lucky them. What happens to your pension if you do move abroad?

[00:25:22.84] OK, there's two things that you've got a choice on what you do with your pension when you move abroad. You can leave it in the UK. So even though you're not living here anymore, you can still have the same options that you would have if you were still in the UK. So that's one option. And you can have your pension or your lump sums payable to your bank account overseas.

[00:25:46.84] One thing to be aware of, though, is around tax. So because it's a UK pension, it would be subject to UK tax. But you might also be paying tax in the country that you're living in as well. But the UK government has got arrangements with most countries. That means that essentially you don't have to pay tax twice. So if you're thinking of doing that, it's something to talk to revenue and customs about or your local tax office to make sure that you don't pay too much tax if you access it that way.

[00:26:16.34] The second option is if you've got a pension scheme that's actually in the country that you're living in, you might have the option to transfer your UK pension into that. But as with consolidation, there's lots of things that you need to think about before doing that. So you need to compare the options and the features of both schemes. You need to think about the charges that you're paying, whether you could lose any valuable benefits and things like that. But in the main, you've got two clear choices for you-- leave it where it is or move it.

[00:26:48.90] Brilliant Thanks so much for that. That's really useful for a lot of people. We've had lots of questions about investing your pension. A member has asked us, what level of investment risk would you recommend? Hemisha, please could you answer this one?

[00:27:03.54] So I'm unable to give individual financial advice. This will very much depend on a member's appetite to risk and their personal circumstances. There's a lot to consider, and they may wish to take financial advice. However, I can give some top tips to think about. So within the fund range, you're able to either choose your own investment options. And this is from a range of different options that we have available, depending on what you want to do.

[00:27:26.52] And then if members don't wish to pick themselves or they wish to just allow us to have a look at and use our expertise, then we have what we call the default investment option. For our members, this is either the target date fund range or the lifetime advantage funds. You will benefit at this point from oversight by L&G and the constant evolution of these strategies. You can find out more information about these two fund ranges on the online account or on the app.

[00:27:55.60] Brilliant. Thanks so much for that. OK, next one. Andy, I think, we're going to come to you. The question here is-- how can I increase my monthly pension contributions?

[00:28:06.04] OK, great. Well, it sounds like my passion plea for additional contributions has paid off which is no bad thing. So I think first and foremost, yeah, I think, as I was saying before, I mean, whatever you can pay in extra, particularly the younger you are, has a really big compounding impact of what you can have at retirement.

[00:28:23.70] There are a number of different ways that you can pay additional amounts into your pension. First are ones being you can make additional one off contributions via the app. But I would say the first port of call would be to have a look at your employer's contribution structure. Potentially, as I said before, there is an opportunity for some of these schemes where the company may pay more in if you pay more in.

[00:28:43.68] So I think your first port of call is have a look on your company's sites and maybe speak to your payroll team. Again, there are other options about maybe sacrificing your bonus and making additional contributions, but I would say have a look to see what your contribution structure is before you go any further.

[00:28:58.38] Brilliant. Thank you so much. Great recommendation. We've got another question for Hemisha this time. Some members have asked about investing versus cash. Can you explain what this means?

[00:29:11.39] So compared to holding, your money's in a bank account, which to many members may feel like the most familiar way to save, investing into your personal pension has many benefits on top of the ones we've already described. These are the tax efficiencies and the fact that you have the employee contributions. So holding it in a bank account, it means that your pension is not invested at this point in time, and you're not experiencing investment growth.

[00:29:32.35] Your moneys are also not protected from inflation. And over the longer term, this could have quite an impact on your retirement income. But it is also important to remember that investments can go down as well as up, and past performance is not an indication of future performance.

[00:29:47.27] Of course not. Thank you very much. Thanks, Hemisha. We'll be answering more of your questions in just a moment. But I'd love for our viewers to take part in another poll. And the question this time is, do you think that you're saving enough for your retirement? And you've got yes, no, or not sure.

[00:30:05.71] And while we wait for the poll results to come through, Andy, I'm going to come back to you for another question, if I may. Please, could you tell us what are the tax implications of withdrawing from your pension?

[00:30:17.21] Well, first of all, I was quite relieved to hear that there was quite a lower percentage of people who are thinking about fully cashing out because, as I talked about before, one of the really key things to think about when you're accessing your pension is what are the tax implications. And, as I mentioned before, you've got the tax free cash 25% in most cases to fall back on, but the income will be charged. You will be paying income tax on what you receive above the 25%.

[00:30:42.39] So it's really important to think about whether actually is taking a big cash lump sum the right thing to do. And should I be spreading it over a longer period to go around and think about whether it's more tax efficient to do that? Again, as we've mentioned a couple of times, we've got loads of tools and information to help support you. So do reach out to our teams if you need support.

[00:31:04.51] Pension wise, again, is a really good place to speak to, and they are specialists in retirement options. And again, we do have a tax calculator online, which you can help you understand what the tax may be on the income that you receive.

[00:31:20.23] Brilliant. Great. Thank you. Another call out for the different tools that we've got available to us as well. And there we go. Wonders of technology again. We've got the results coming through from the poll that we've just asked. So we asked, do you think that you're saving enough for your retirement? And our view is 37.8% of them have said yes, 28% of them have said no, and 34.2% of them have said not sure. Just jumping to you, Colin. What do you make of that?

[00:31:49.27] I think it's great that there's people that are confident enough that they're saving enough for the retirement that they want. It would be useful to look at the different lifestyles, though, that Andy mentioned, just to really double check as to whether you are actually going to achieve the lifestyle that you really want, rather than just a sort of moderate income.

[00:32:12.12] For those that don't you, again, it goes back to the useful tools that we've mentioned before. It would be good now to have a look at that guided retirement planner and get more information and try and understand a little bit better as to whether you are or you aren't and some simple steps that you can take to improve that if you're not.

[00:32:33.48] Brilliant. Thank you. Thanks so much. And yeah, just to reiterate there, I think, as per what Nilly demonstrated so wonderfully earlier, a lot of that information you can get through the L&G app. Great. Right. So I think we've got some more questions that are starting to come through, and I'm going to jump back across to these now if that's all right. So Andy, we've got one for you this time. It's can you explain-- and actually you did call this out, and I thought this is great because I'm sure there'll be an opportunity for you to go into this in a bit more detail and when it comes up to questions-- can you explain what the terms DC and DB mean, and why are they different?

[00:33:06.14] OK. Great question. So when we talk about DB, we mean defined benefit. So you may have heard the terms like final salary. And the term defined benefit, as the name suggests, is around giving you a guaranteed income from a workplace pension scheme. You may have been entitled to a final salary scheme, and you may have some of those benefits due to you.

[00:33:28.78] When we talk about defined contribution, what we're talking about here is building up a pension pot of savings that you pay in. And as the name suggests, defined contribution, what we know is the amounts that are going in and what you're paying in. But really the difference here from a defined contribution perspective is you have flexibility. You'll be building a pot at retirement for you to draw on. And again, there is quite a big difference between the two.

[00:33:51.18] Brilliant. Thanks for that. I think that's a lot clearer now. Hemisha, we have a question here from somebody who says that they follow an Islamic faith. Can they still invest in their pension?

[00:34:01.12] Yes, they can. So we've always had a self-select option available, a global equity fund that keeps to Sharia law. However, last year, we launched the Sharia lifestyle. So this lifestyle was built with the same team that designs the default, so the same philosophy in mind. But it makes sure that all of these investments do not breach Sharia law. So those following an Islamic religion, they can invest into this. And they can also benefit from having a workplace pension.

[00:34:28.78] Brilliant. Great. Thank you so much. Andy, I've got a question for you. Do we have to use the app? I prefer desktop. Obviously, some people do. We've talked a lot about the app today, but is that the only way to do things?

[00:34:42.20] No, you go into your online account on the computer. And actually, sometimes it's really good to look at it through a bigger screen, particularly if you're using, say, the retirement planners that we've talked about. So again, everything that you can do on the app, you can also do online. There's no problem. And also some people, like myself, like to just pick the phone up. So we're there at the other end of the line if you do want to speak to us. But no, you don't have to use the app.

[00:35:04.82] Brilliant. Thank you. That's good. That's reassuring for a lot of members, I think. Colin, this is a question from someone who's a person after my own heart. I have pensions dotted around all over the place. Is it generally better to combine them?

[00:35:19.54] It's going to be personal. It's a personal choice. So it depends what you've got. It depends on the features that you've got in those pensions. I mean, from a practical point of view, it's easier to manage everything in one place. But there are some warnings that you need to watch out for. You might be paying higher charges. You might be losing valuable benefits.

[00:35:41.74] As Andy said, we've got a tool called My Future Now and a guide to transfers, which will explain all of the things to think about. And then once you've read that information, got financial advice. If you think you need it, then you can make a choice as to whether it's the right thing for you.

[00:35:56.51] Brilliant. Thank you so much. We've got some more questions around investing. So this one here for you, Hemisha, if that's OK. It says that I'm in the default fund. What happens to my investments if I change my retirement age?

[00:36:09.63] That's a great question. So in the default fund, members really only have to select one thing-- what they want to do at retirement and when they're going to retire. Based on that age, you're placed in a fund. So their five year cohorts, which closely represents when you retire. So if you change that age, you might be moved into a different fund that moves in line so that your investments match the time that you retire. And they're protected in line with it the best that we can.

[00:36:37.59] So if you were to change your retirement age by say, 10 years, then you would be shifting to a different bucket and then also moved alongside that. So it does make-- you do have to make sure that you have a look online if 65 is still the right age for you. So that's something else that you want to change to because that's usually what it's automatically selected as. And if not, I would encourage people to log on and make that change.

[00:36:58.17] Brilliant. Thank you. Well, actually, a similar sort of vein about when's the right time to take your pension. And we've got a question here that's probably for you, Colin, which is are there any disadvantages in postponing your pension?

[00:37:11.65] I mean, it comes down to affordability really, and what your overall circumstances are, and how much income you'll need. The longer you leave your pension invested, the more opportunity it has to grow. You've got the opportunity to save more into the pension as well. The downside of that is that if you're short of money and you need income, then it might be better to access your pension a little bit earlier, just to help with your day to day needs.

[00:37:41.37] So again, it's going to be very personal. But those are the pros and cons. If you need the money, early access might be the right thing for you. But if you can afford to wait, then waiting has got the potential for you to have an even better outcome later on when you do access it.

[00:37:57.27] Brilliant. Thank you for that. Andy, you mentioned a little bit of this in your presentation. And for people who are lucky enough to get a bonus, an annual bonus, how might they put that bonus towards their pension?

[00:38:10.43] So some employers allow you to do something called bonus sacrifice. And what that means is instead of the bonus being paid into your pay and you paying tax on your bonus, you can choose to have the bonus paid directly into your pension. And that has some obvious advantages because, again, it's very tax efficient to do that. You don't pay the tax that you would have paid on the bonus, and the full amount would go into your pension.

[00:38:33.77] So it's one to think about and maybe just check with your employer to see whether it's a facility which you think is available. And again, the other thing to think about is in most cases, you have 60,000 pounds per year that you can get tax relief on from an annual allowance. And just have a think to make sure that you're not going above those limits to have because you may end up paying additional tax charges.

[00:38:54.18] Great. Thank you. Thanks so much. Much clearer. We have another question here. Very politely framed this one, which is lovely. So thank you for that. Would it be good to understand-- so it would be good to understand how semi-retirement works if I want to draw down a little but also continue to work part time? Thank you. And I think that's probably for you, Colin.

[00:39:14.36] OK. Yeah, very important part of retirement planning now. Retirement isn't really the cliff edge that it used to be where you left work at 65, and you got a carriage clock from your employer and a handshake and off you went. So there's a lot more flexibility as to the patterns of work and reducing your hours and working part time.

[00:39:37.76] I think the thing to remember about pensions is that they can be flexible. You can start taking your private pension and your state pension as well, even if you want to carry on working. But the thing to just be aware of is the potential change on the limit of money that can be put into the pension every year. So different options will affect that in different ways.

[00:39:59.80] If you were to buy an annuity, even if you only used part of your pension pot to do that, you could still carry on saving the full annual allowance that Andy mentioned of 60,000. If you wanted a flexible income through drawdown, that's when it gets cut down to 10,000 pounds, which is still a lot of money. You can still carry on topping it up, but the benefits may well outweigh the drawbacks, really. So there's lots of things to think about. But yes, it is fully flexible.

[00:40:30.42] Brilliant. OK. Thank you very much. I've got a question for Andy this time, which is do L&G offer financial advice?

[00:40:38.30] We do. We do have a team called legal and general financial advisors who are an independent team of financial advisors. So again, if that's something you want to look at, you can come through and ask to speak to the team, and they can give you advice on your pensions and your investments.

[00:40:55.20] You can also go out and shop and choose an advisor across the market. And as I mentioned before, you can have a look at unbiased.co.uk to access that. Things to weigh up is kind of what charges you might pay for the advice you're looking to receive. And also just the type of advice that you're looking for as well. So again, always worth having a look around and shopping around.

[00:41:14.28] Brilliant. Yeah. That's good advice I think anywhere, isn't it? Colin, I assume this isn't-- are you personally able to help? But are you able to help with consolidating old pensions? You did talk about it a bit before, I think, but--

[00:41:27.84] Yeah, personally. [LAUGHS] It might be a bit difficult. But the guidance that I would give is really to have a look in your online account at the tools that we've got to help with consolidation and the guide that we've got to pension transfers, and that will really help you think about things that are personal to you around the charges to consider, whether the pension pot is giving you the right options at retirement, and all of those valuable things-- watching out for scams, things like that.

[00:42:03.30] So yeah, my advice with a small a, if you like, is go and have a look at the guides that we've got in your online account, and that will give you a lot of information that will help you make the right choice.

[00:42:16.78] Brilliant. Thank you so much. A great way to end our Q&A. I think that's it. We don't have any more time for questions, but before the event ends, we would love to receive your feedback on what you thought of today. Any moment now, you should see a short poll to enter your feedback, and we'd be really grateful for your time in taking a moment to let us know your thoughts.

[00:42:36.26] That is all we have time for today. I just like to remind you about some of our top tips to strengthen your pension, which we've discussed today. Number 1, get online, download the app to check how much you've got saved already. Number 2, complete a retirement plan using the retirement planner, which can help show you if you're on track for retirement that you want. And number 3, if you have more than one pension pot, think about whether consolidating them is right for you.

[00:43:03.07] We will share this recording and the newsletter with useful tips in the coming weeks, so please look out for that in your inboxes and remember to download the new L&G app if you haven't already. Thank you so much to my brilliant panel for joining me today. And most of all, thank you to all of you for watching our event and for asking so many great questions. If your question wasn't answered today, you can log into the app or your online account to get some help. We hope you've come away with some great tips for strengthening your pension, and we really hope to see you here again. Goodbye.