Introducing workplace pensions
Your workplace pension is a tax-efficient investment vehicle that you use to save for retirement. If you are currently employed and part of a workplace pension, each month your employer will give your retirement savings a boost by contributing towards them. And you may also be contributing towards them yourself.
Over the years, you may end up with a significant amount of money. It could be one of your most valuable assets and is probably among the most important benefits your employer provides.
Four essential facts
- This isn’t the State Pension – the State Pension is paid by the government when you reach your State Pension age and would be paid in addition to your workplace pension. The amount you receive from the State Pension is based on the National Insurance contributions you have paid. You can check what age you are eligible for the state pension using the GOV.UK website. The age you receive your state pension may be different to the scheme default pension age.
- You become a member automatically – if you are between 22 and the State Pension age, earn at least £10,000 and are working ordinarily in the UK, you will be enrolled in your workplace pension without having to do anything, though you have the right to opt out if you choose. This is thanks to auto-enrolment.
- You’re in control of your savings – You may decide that you would like to leave it up to the experts and your plan will be invested in your plan’s ‘default’ investment option. Alternatively, you can decide how the money in your pension is invested by self selecting from the range of funds offered in your plan. When the time comes to take money out of your pension, you will you will have range of options how money can be withdrawn from your pension. These are subject to your plan rules. Although your pension will have a default retirement age, you can adjust this at any time if it doesn’t match your plans. The minimum age you can normally access your pension savings is currently 55, and is due to rise to 57 on 6 April 2028.
Find out what affect your retirement age has on your pension savings. - The money invested in your pension is yours – so make sure you don't lose track of your pension with Fidelity by registering for your online PlanViewer account. Through PlanViewer you can manage your pension savings (including reviewing and selecting funds), keep your contact details up to date and more. Over your lifetime, Fidelity will look after the money you have invested with us all the way up to, and even in your retirement. Log in to PlanViewer
How your pension account works
1. Contributing
Once you have been enrolled in your pension plan, your employer will pay a percentage of your salary into your account in line with any contributions you are required to make, along with their own contribution. Tax treatment including tax-relief depends on individual circumstances and all tax rules may change in the future. Find out more about tax-relief on your contributions.
There are minimum contribution levels for any qualifying workplace pension. However, some employers choose to pay in more than this. You can check the contribution levels for your plan by logging in to PlanViewer and finding the Contribution Information document in your ‘Forms and documents’.
You may also be able to increase your contributions, which could mean your employer puts more in too, as well as receiving tax relief from the government.
2. Investing
Once the money is paid across to Fidelity, it will need to be invested. Your workplace pension has a default investment option which is designed to suit the needs of many different members throughout their working lives.
Your money will be invested in this default investment option unless you choose your own funds from the range of funds available in your plan. You can change your investment options at any time via log in to PlanViewer or calling our Workplace Investing Service Centre.
It's important to remember that the value of investments can go down as well as up, so you may get back less than you invest.
You can find out more about these options on our 'How pensions are invested page'.
What it costs
There are no explicit charges for putting money in your pension plan. This means that if you contribute £100, the whole £100 is invested in your plan.
However, there are charges for the administration of your plan and management of the fund(s) you invest in. These are collectively known as a ‘Total Expense Ratio’ (TER). They are taken from the fund’s assets and reflected in the quoted daily price. For example, investment in a fund with a TER of 0.20% would mean a charge of 20p for each £100 invested in your account per year. They are not explicit charges taken from your pension savings and thus do not show on your transaction history.
In addition to the TER, other transaction costs can be incurred on your funds, such as the costs involved in buying and selling a fund’s underlying investments. Like the TER, they are not explicit charges and are built into the daily unit price of your funds.
You can find out what funds you are invested in, and read fund factsheets to find out each fund’s TER, as well as what it invests in, by logging in to PlanViewer. You can also use our costs and charges tool to see how all the above charges may impact your plan.
Ready to find out more?
Making contributions
If you're part of a workplace pension & employed, your employer will be contributing to your pension. You may also make contributions which are deducted automatically each month before you're paid.
You’re an investor
We typically invest your pension savings in funds that aim to make your money grow in the earlier years, & aim to protect your money from sudden falls caused by volatility as you approach retirement.