How does The People’s Pension work?
Your plan works on a money purchase basis, also known as defined contribution. Pension jargon alert! Actually, it’s pretty simple in practice. The money you and your employer pay into your pension is invested and grows over the years. And, you’ve guessed it the more that’s paid in and the better it grows then the bigger your savings pot will be.
Is The People’s Pension different to other providers?
Unlike, the newer auto-enrolment pension providers Nest and NOW Pensions which have been providing pensions for around 5 years The People’s Pension have been doing so for over 35 years. They’re run on a not-for-profit basis and aim to return their profits to you and the other members.
The People’s Pension has independent trustees so that employers can use their expertise to oversee and take care of your pension savings, and run the scheme in your best interests.
Free pension information guide
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What about the charges?
There’s an annual fee of 0.5% which is charged on your pension pot and works out to 50p for every £100 of savings you have in your account. It’s not possible to continue to pay into your plan yourself if you leave your employer, unlike a personal pension.
Can I continue to pay in if I leave my employer?
Yes, you can continue to make monthly contributions and also pay in occasional lump sums.
Can I opt out of The People’s Pension?
It’s possible to opt out at any time of your choosing, even on a temporary basis. If you opt out of the pension at the beginning then after 3 years your employer must auto-enrol you again, but you could opt out again. With the benefit of free money from your employer think carefully before you do this!
Is The People’s Pension the same as Nest and NOW?
There’s little to choose between each of them. So, you’ll pay a similar amount in charges for having your savings with them and their terms and conditions are broadly similar.