The Annual Allowance (AA) is a limit on the amount of pension savings you can make into your scheme(s) (you may have more than one) in any given tax year. If you exceed your AA, you may be charged tax on the excess.
The AA is currently £60,000, although a lower allowance applies to high earners. If your taxable income is more than £200,000, you should learn more about the tapered annual allowance as it may affect you.
You can carry forward any unused Annual Allowance from the past three years.
A lower allowance of £10,000 may apply to any future pension savings you make to defined contribution pension arrangements if you’ve taken money out of your pension pot. This is known as the ‘Money Purchase Annual Allowance’.
The Lifetime Allowance (LTA) is the maximum amount you can save into all your registered pensions throughout your working life before you have to pay tax. The LTA for the tax year 6 April 2022 to 5 April 2023 was £1,073,100. The LTA will be fully abolished from the 2024/2025 tax year through a future Finance Bill.
This means that from 6 April 2023 the current lifetime allowance framework remains in place and the lifetime allowance for 2023/2024 remains at £1,073,100 and that if you receive a benefit in excess of the LTA, during 2023/2024, the LTA charge has been abolished and any excess will be taxed as income at your marginal tax rate.
For further details please go to: www.gov.uk/government/publications/abolition-of-lifetime-allowance-and-increases-to-pension-tax-limits
You can read more about the AA and LTA on this website and on the government website.
You are responsible for monitoring your AA and LTA and reporting any excess to His Majesty’s Revenue & Customs (HMRC).
Like many things in life, saving is a whole lot easier if you don’t have to do it alone. With a pension it isn’t just you saving for your retirement; it’s you, your employer and the government (in the form of tax relief).
The money paid into your pension pot is known as ‘contributions’*. Contributions can come from:
*Other than administration charges, all of your money will be used for your retirement pot.
You are responsible for reporting any excess in your benefits over the Annual Allowance (after using up any carry forward) via self-assessment. The amount of Annual Allowance charge will be included in your tax calculation and you would normally have to pay any charges by the usual self-assessment payment deadlines.
The Scheme also has a responsibility to notify HMRC via Event Reporting if someone exceeds the Annual Allowance.
A member can request use of the ‘Scheme Pays’ facility in order to meet the tax charge.
Learn more about tax allowances on this website.
Retirement is no longer seen as ‘the end of the road’, and most of us won’t want to change our lifestyles because of it. Why not take the time to think about what you want for your retirement so you can start planning for it today?
The lifestyle calculator can help you get an idea of what your unique lifestyle costs and how much income you may need to afford it when you retire.
The amount you’ll get depends mostly on how much has been paid into it and:
The benefit categories of the Uniper Group of the ESPS are defined benefit. The Uniper Pension Plan is a defined contribution scheme.
You can also ‘top up’ your pension by paying Additional Voluntary Contributions (AVCs). These will be paid into defined contribution arrangements. Go to the boosting your ESPS benefits page if you're an ESPS member, or the boosting your UPP benefits page when you're an UPP member. Your employer will also be able to tell you more about AVCs.
If you are about to become a parent, congratulations! If you are absent from work, you will need to check about continuing contributions with your employer. If you get maternity, paternity, additional paternity, family or adoption leave pay, your contributions are based on what you are earning at that time, but your benefits are based on your normal rate of pay.
If for any reason, you can’t pay the contributions, these may be collected from your future earnings.
Additional Voluntary Contribution (AVC) arrangements are tax-efficient ways for pension scheme members to save a bit more towards their retirement.
AVCs are contributions you make from your pay (before tax is taken) on top of the normal contributions you make as a Scheme member.
AVCs can be a way of making up the shortfall (if there is one) between the pension you will get in retirement and the income you will need to sustain the lifestyle you want after you stop getting a salary from your employer.
Your contributions are tax-free, subject to certain limits.
AVCs may be something you want to consider if you:
To learn more about AVCs, go to the boosting your ESPS benefits page if you're an ESPS member, or the boosting your UPP benefits page if you're an UPP member.
Yes, but, please think very carefully before you transfer your pension to another provider. Consider your long-term financial position and what you want your pension to support in the future. You should carefully compare the benefits of the Scheme with those offered by alternative personal pension plans or any other arrangements.
You may want to consider getting some help from an Independent Financial Adviser (IFA). You can find IFAs in your local area on the Unbiased website.
If you leave Uniper or decide to leave the Scheme for any reason, your benefits will be kept in the Scheme until you’re eligible to claim them and you will become a ‘deferred’ member. The company's contributions into your pension will also stop.
Go to either the deferred ESPS members section or the deferred UPP members section for more information.
When you leave the Scheme, your benefits will be deferred until you are ready to claim them when you retire. Once you have left the Scheme, you become a ‘deferred’ member.
If you're an ESPS member, go to the deferred ESPS members section, and if you're an UPP member, go to the deferred UPP members section, for further information.
You may want to consider getting some help from an Independent Financial Adviser (IFA). You can find IFAs in your local area on the Unbiased website.