Group Personal Pension
A Prudential Group Personal Pension is a collection of personal pension plans set up by your employer and provided by us. It's a tax-efficient way for you to save for your retirement.
And with average life expectancy increasing, saving in a pension and topping it up could be a great way to help build up a larger fund for when you take your benefits.
- You can stop, start and vary your contributions at any time.
- Contributions to a Group Personal Pension qualify for tax relief.
- You can contribute as much, or as little as you like.
- Your employer can also contribute to your pension.
- You can invest your contributions in a range of funds.
Risks and considerations
- This product is only available through select employers and the range of funds available to you will depend on the scheme you join.
- The value of any investment can go down as well as up so you may not get back what you put in.
- Tax relief will depend on your individual circumstances and is subject to change in the future.
- Charges will continue to be applied and if you stop or reduce contributions this will impact your retirement benefits.
There are various reasons why you could consider saving into a Group Personal Pension. For example:
- Tax relief - subject to HM Revenue & Customs (HMRC) limits, for every £80 you invest in your pension, the government will pay an extra £20 tax relief. Your contributions are paid into the fund after your income has already been taxed. If you earn above the basic rate of tax, you can claim additional tax relief through your tax self-assessment form. You are also usually allowed to take up to 25% of your fund as tax-free cash when you retire. Note the remaining pension you receive is taxed as earned income.
- Affordable - there are no minimum or maximum payments (although there are limits on the amount on which you can receive tax relief).
- Employer contributions - both you and your employer can contribute to your plan. See the benefits of employer contributions.
- Flexible - you can stop, start or vary your payments without penalty although charges will continue to be deducted. Note that if you decrease or stop payments, this will impact on your benefits at retirement.
- Access to a range of funds - your pension contributions can be invested in a range of funds, although the funds actually available to you may depend on the scheme you join. Bear in mind that the value of your investment may go down as well as up and you may not get back your original investment.
Contributions from your employer
In some group personal pension schemes your employer will normally at least match your contributions. If for example you were to pay in £100 per month (including tax relief, subject to government limits), your employer would contribute £100 too.
Matching your contributions in this way will depend on the plan rules, and if they do match what you pay in, they may only contribute up to a certain percentage of your salary.
Even though they are offered through your employer, group personal pensions are personal pension schemes, and this means you have an individual contract directly with the provider.
Pensions and tax
Paying into a pension plan attracts tax relief but there is a limit on how much you pay in before you face a tax charge known as the Annual Allowance. When you're ready to take your pension benefits, if all of your benefits exceed a Lifetime Allowance you may be subject to a tax charge. For most people the Lifetime Allowance isn't a problem. You may also have to pay tax when you start taking an income from your pension.
Understanding all of the tax rules can be very complicated so we’ve prepared a guide to show how this may affect you. Our Questions & Answers document provides information such as:
• Tax relief on pension contributions and the limits
• Annual Allowance
• Tapered Annual Allowance
• Money Purchase Annual Allowance
• Lifetime Allowance
• Pensions Protection
You can also get more information on the gov.uk website by visiting www.gov.uk/tax-on-your-private-pension.
To learn more on the Group Personal Pension see the Group Personal Pension Key Features.
Are you an existing customer?
If you already have a Group Personal Pension, read about the benefits of topping up.
Please speak to your employer to see if they offer a Group Personal Pension Plan with Prudential before contacting us.
Monday to Friday, 8.30am to 6pm
A pension scheme provided (sponsored) by an employer for its employees. Company pension schemes can be defined benefit schemes (final salary schemes) or defined contribution schemes (money purchase schemes).
The UK government encourages you to save for your retirement by giving you tax relief on pension contributions. Tax relief works by reducing your tax bill or increasing your pension fund.
We are not recommending one product over another. We recommend you seek financial advice if you’re unsure about what product could be right for you. The information above is based on our understanding of current taxation, legislation and HM Revenue & Customs practice, all of which is liable to change without notice. For more information please visit www.hmrc.co.uk.