Planning for your future and saving more
You can probably already picture the retirement you want. Knowing how much that lifestyle is likely to cost, and whether you can afford it, is an important part of planning for your future - and gives you time to potentially boost your pension account if the numbers do not add up.
Find out below how to set your own retirement target and save more towards it with the different options offered to you by the UPP.
Setting a savings target
Will you have enough money to live the kind of life you want when you retire? Follow these simple steps to find out and give yourself something to aim for.
1. Work out how much you should be saving
The Retirement Living Standards (RLS) offer a general guide to how much income you may need (after tax) when you stop work. When you are looking at these figures, keep in mind, it assumes that you will not have any mortgage or rent payments to make. You can find out more on the Retirement Living Standards website.
For a more personalised estimate of how much you should be saving, you can also use the Fidelity Retirement Calculator to check the suggested savings rate for you.
Please note this is based on various assumptions (details of which are available on the Fidelity website). It is only for guidance and is not a personal recommendation.
2. Work out how much you are likely to get in retirement
You will need to take into account all your possible sources of income. These can include:
- Your UPP pension account - you can check your Benefit Statement or request an up-to-date value of your pension account by logging in to PlanViewer at www.fidelitypensions.co.uk or contacting Fidelity
- Your State Pension - the amount you get is set by the government. You can request an estimate online at www.gov.uk/check-state-pension.
- Other pensions - such as a private pension or pensions linked to previous employment. You will need to speak to each of the providers individually for estimates on those accounts. If you have lost their contact details, the Pensions Tracing Service may be able to help. It is a free, Government-backed service available online at www.gov.uk/find-pension-contact-details and over the phone on 0800 731 0175, or +44 (0) 191 218 7777 if you are calling from outside the UK. Other companies offer a similar service but may charge a fee.
- Savings and investments - if you have savings outside of your pension, get those statements from your bank or other provider.
Remember, the RLS figures (as shown above) are based on the income you may need after tax, whereas your pension estimates will give you a guideline of what you may get before tax.
3. Compare what you are going to need with what you are likely to get
If you do not think you are on track to pay for the retirement you want, then you may need to make some changes to help you reach that target.
These could include:
- adjusting your lifestyle
- changing your retirement date, or
- saving more.
If you want to save more, there are a number of ways you could do this as shown in the dedicated section on this page. These options could be particularly helpful if you:
- have extra earnings such as overtime
- are thinking about taking your benefits early (see the taking your pension account page)
- want to save a bit more and give your future income plans a boost
Saving more towards your target with the UPP
If you want to save more for retirement, you may be able to boost your pension account. Options for doing this include:
Changing your salary sacrifice contributions
As a UPP member, the minimum contribution is 3% of your pensionable salary. If you contribute 3% of your pensionable salary then Uniper will contribute 6% of your pensionable salary. Your pensionable salary is your basic annual salary plus any regular payments specified by Uniper as part of your pensionable pay. More information on this is available in your UPP key features document.
To save more towards your pension benefits. you can choose to pay up to 6% via salary sacrifice. If you contribute 6% of your pensionable salary then Uniper will also increase its contribution to 12% of your pensionable salary. You can switch contribution levels in each Benify flexible benefit window, to take effect from each April.
Paying additional contributions on top of salary sacrifice
You can also make personal lump sum contributions, to your pension account at any time. If you are interested in this option, you should contact Fidelity. These contributions will not be made via salary sacrifice or payroll so you should discuss with Fidelity how to reclaim any tax.
There are no limits to the amount of contributions that you can make to your pension account, but HMRC does restrict the level of contributions that can enjoy the full tax advantages. This restriction is known as the Annual Allowance (AA). Please see the tax allowances page for more details.
Paying some of your bonus into your pension account
You may be able to apply part, or all, of your annual bonus directly into the UPP. This is called a bonus waiver. Go to the dedicated bonus waiver page for more details.
Considering your investment choices
The UPP is a defined contribution (DC) scheme. This means the amount you get will depend largely on the amount paid in and the performance of the funds it is invested in. So, it is important to understand the investment options available and check them regularly to ensure they are the best fit for you.
You can learn about this on the investments and fund choices page and see the full details of the funds available to you, including statements of their investment objectives, by logging in to, or registering for, Fidelity's PlanViewer platform. Alternatively, you can contact Fidelity directly.
Please note that the value of investments can go down as well as up.
Getting financial advice
Neither Uniper or Fidelity can give you financial or investment advice, so you may want to consider seeking independent financial advice before making any decisions.
You can find further information on the help and advice page.