Making contributions to your Royal London pension plan

If you have a personal pension

If you’re saving into our personal pension, Pension Portfolio, your contributions will be made from your net salary by direct debit.

If both you and your employer want to contribute to your personal pension, we’ll need to set up two separate plans because we can only accept one direct debit per plan. 

If you have a workplace pension

If you’re saving into your employer’s workplace pension, your contributions will be paid to us by your employer.

Contributions will be made from your net salary or by using salary exchange. If you’re not sure, your employer can tell you which one applies to you.

Contributions made from your net salary

Tax relief can be confusing, but it's worth understanding tax relief so you can make the most of it. You'll receive tax relief on all regular contributions you make to your plan up to a maximum of £3,600 a year or 100% of your earnings, whichever is greater. The annual allowance for this tax year is £60,000, which means you could contribute £60,000 before a tax charge may apply.

Your contributions are taken from your salary after tax and National Insurance Contributions (NIC) have been paid. Pension contributions benefit from tax relief. This means that if you're a basic rate taxpayer if you pay £80 into your pension, you'll get tax relief from the government to increase it to £100. Your employer may also contribute and this can help to boost your pension savings. If you're a higher or additional rate taxpayer you'll need to claim the difference between basic-rate tax and the amount of tax you pay from HM Revenues & Customers (HMRC).

Your regular contributions are usually paid monthly and can be paid as a percentage of your salary or as a fixed amount. If you're saving into our personal pension and your salary changes you'll need to let us know.

Contributions made using salary exchange

Salary exchange is an agreement between you and your employer where you voluntarily exchange part of your gross salary in return for employer contributions into your pension.

You give up part of your salary for a non-cash benefit, in this case an additional employer pension contribution. As your salary is reduced, you pay less tax and National Insurance Contributions (NIC). Your employer may also contribute and this can help your pension savings grow. If you're a higher or additional rate taxpayer you don't need to claim this back from HMRC.

Salary exchange may not be suitable for everyone, and it could affect your entitlement to other benefits such as statutory sick pay. You should speak to your employer for more information. If you’re not sure whether salary exchange is right for you, you should speak to a financial adviser.

Minimum contributions for workplace pensions

There's a total minimum contribution that needs to be made to your workplace pension. Your employer must contribute at least part of this. If your employer contributes less than the total minimum amount, you’ll have to make up the difference.

Your employer will confirm the contributions you’ll have to make and will tell you if that amount will change. To find out more about the minimum contributions for your plan, speak to your employer.

Make a single contribution to your pension

You can make a single contribution into your plan at any time. You could make a one-off contribution into your plan to help your pension savings grow.

You can pay in up to 100% of your earnings or the annual allowance, whichever is lower, and receive tax relief on these contributions. You can also ‘carry forward’ unused annual allowance from the last three tax years.

Any single contributions made to your plan will be invested in line with your current instructions unless you tell us otherwise. Remember, the value of your investments can fall as well as rise and you may not get back the amount invested. Tax relief depends on your individual circumstances, where you live in the UK and could change in the future.

Your money is invested until at least age 55 (this will increase to age 57 from 6 April 2028) when you can start to take your pension savings, so you should consider all your options before deciding to make the payment.

Transfer payments into your pension from other pension plans

You may be able to transfer pension savings from other pension plans. This could make it easier for you to keep track of them.

Transfer payments from one pension plan to another don’t receive tax relief. Transferring may not be in your best interests as you could lose valuable benefits which can’t be replaced. You should speak to a financial adviser before you make a decision.

Changing your regular pension contributions

You can increase, decrease, stop and restart your contributions at any time. But remember that any changes to your contributions will affect your pension savings, pausing or decreasing your contributions could mean you miss out on savings in the future. It can also mean any forecasts you've had before will be less than you've planned for, and some charges may still apply.

If you want to change the contributions into your personal pension, you should speak to a financial adviser.

If you want to change the contributions into your employer’s workplace pension, you should speak to your employer. They’ll tell you what changes you can make and how to make them.