Pensions

Making changes to your payments to your pension plan

If you’re thinking about changing the amount you pay into your pension plan, we’ll be happy to help. It’s important to understand all your options, and the effect of any changes you make. There are a few things you should think about before you make any decisions.

If you have any questions once you’ve read this summary, or need any help understanding your options, just call us on 0345 640 1000, or +44 178 644 8844 if you’re calling from abroad.

How a pension plan works

There’s a variety of pension plans available. They’re designed to provide a tax-efficient way of helping you to build up a pension pot to provide for your retirement.

Pension plans offer tax relief on your payments, subject to certain limits, with any growth in your plan being largely tax-free. In most cases you can take up to 25% of your plan tax-free and the remainder will be taxable.

Tax rules are complex and require careful consideration and the impact will depend on your individual circumstances. Taxation, legislation and HM Revenue & Customs practice is liable to change without notice. You may want to seek advice.

Your options

Your options will vary, depending on your plan and the choices you’ve made so far. We’ll explain them further if you call us.

Alternatively you could take a temporary break from payments or make you plan paid-up which means permanently stopping payments.

Things to consider before making your decision

There are a few things you should think about before making changes to your payments:

  • If you reduce your payments the amount available when you take your benefits will be reduced.
  • Charges on your plan may change.
  • Any additional benefits, like life cover or waiver of premium, could be affected.
  • The amount of tax relief you get is related to the amount you pay.
  • You could exceed your annual allowance, resulting in a tax charge.
  • If your employer also makes payments these might be affected. Your employer should be able to help you.
  • There could be an impact any state or salary related benefits that you may be entitled to.

Depending on your plan and how close you are to taking your benefits, it may not be possible to increase payments to the With-Profits Fund.

Protecting yourself from pension scams

According to Action Fraud, the UK’s fraud and internet crime reporting centre, an estimated £1.2bn is lost to investment scams every year. So if you’re thinking of reinvesting the money from your plan, take a minute to find out more, and stay ahead of the scammers. There is also some very useful information available from The Pensions Regulator.

What to do now

Give us a call on 0345 640 1000 or +44 178 644 8844 if you’re calling from abroad. We can’t give you advice or make your decision for you, but we’ll be happy to help you understand your plan and talk you through all your available options and their possible implications.

We’re here 8am - 6pm Monday to Friday and happy to help in any way we can. Please make sure you have your plan number to hand when you call.

Alternatively, speak with a financial adviser - if you don’t have one, you can get details of financial advisers from pru.co.uk and selecting ‘contact a financial adviser’. You may be charged for their service.