Spreading Your Costs
Investing for a SHPS pension may cost you less than you think and joining the Scheme means that your employer will also be paying towards your retirement.
Your employer will tell you what your contribution rate is. However, the actual cost may be much lower because paying into a pension plan means you pay less tax. Also, because you will be opting out of the additional State pension, your National Insurance Contributions will be lower. Have a look at the Pension Calculator to see what joining the Scheme will cost in real terms.
Click here for the Pension Calculator.
And don't forget, in addition to the contributions you make, your employer will also be paying substantial contributions on your behalf.
Ultimately, the value of your pension will be related to the length of time you pay into the Scheme and your earnings close to retirement (Final Salary options) or your revalued earnings over the whole of your membership of the scheme (CARE option).
Your pension will continue to grow in line with inflation, up to a maximum of five per cent a year.
Can I make additional payments?
You may want to make Additional Voluntary Contributions (AVCs) if you want your pension to start before you reach normal pensionable age or, for example, a gap in your employment means that you have not made enough provision for your retirement.
AVCs are entitled to full tax relief and can be made through deductions from your salary - either regular monthly payments or occasional or one-off lump sums. The Trust can no longer accept personal cheques for AVCs.
Your AVC fund will be used to provide additional retirement benefits.