Pensions explained

Pensions (also known as ‘pension plans’) can be complicated, but we’re here to answer the most common questions we’re asked about pensions and retirement. 

Understanding your pension

Get answers to general pension questions that can help you understand how your pension works, and how to save money into it.

How much should I save into my pension?

This depends on many things, but it’s a good idea to start by thinking about how much income you're likely to need when you retire. You can start by working out the kind of lifestyle and expenses you might have in the future, including holidays, hobbies, and time with family and friends.

Once you retire, you may be able to supplement your pension income with other sources of income, such as interest from other savings and investments, shares, dividends, rental income from property or part-time work. 

A financial adviser can help you work out a realistic amount you’d need to save to pay for the lifestyle you want. They can then help you plan how to save enough into your pension to achieve your retirement goals.

If you don’t already have a financial adviser, there are a number of directories you can use to search for one in your area, according to their specialisms. Advisers may charge for their services, although they should agree any fees with you upfront.

When should I start saving into my pension?

Although saving for retirement might not be your top priority, the sooner you start, the better. This way, your hard-earned savings will be invested for longer and will have more time to potentially grow. 

For example, if you start saving in your 20s, you could build up more pension savings by the time you retire. If you leave it until your 30s or 40s, you'd need to save much more to build up the same level of income in retirement. 

Keep in mind that investment returns are never guaranteed, as while there's a chance your savings could grow, their value can also go down. This means you could get back less than you started with. 

Read our guide on pension investments to find out more about why, and where, pensions are invested and how much control you have over this.

Can I increase my regular pension contributions?

Yes. You can increase your regular contributions at any time until you reach your 75th birthday.

What if I can’t afford my regular pension contributions?

Don't worry. You can reduce the amount to a level that's more affordable, or you can stop making payments (also known as 'contributions') altogether then restart them when you're ready.

There's no charge for reducing or stopping your contributions. However, the amount you get back when you retire could be lower if you stop or reduce your contributions while you're working.

Can I make single contributions to my pension?

Making a single payment to your plan is a great way to boost your pension savings. 

Depending on your pension provider, you could make single contributions to your plan in several ways, such as a direct payment or by cheque. Restrictions may apply if you’ve started taking your pension savings or reached your 75th birthday.

Unfortunately, you can't make single contributions to your plan if you have a Section 32 Buy Out Plan. You can confirm your plan type in your terms and conditions, annual statement or other correspondence from us.

Investment returns aren't guaranteed. While there's a chance your savings could grow, their value can also go down. This means you could get back less than you started with.

Can I transfer existing pension savings into my plan?

Yes. You could transfer savings from any other pension plans you have into a single plan. This could make it easier for you to keep track of them.

Payments transferred from one pension to another don’t benefit from tax relief. Transferring may not be in your best interests as you could lose valuable benefits that can’t be replaced.  You should speak to a financial adviser before you decide to transfer.

For more information, visit our pension transfers page.

Can I access my pension savings early?

Your pension savings are locked in until you reach age 55. This will increase to age 57 in 2028. It may be possible for you to start taking your pension savings before age 55 if your health means you can no longer carry on working.

What happens when I choose to take my pension savings?

You'll be contacted by your provider before you start taking your pension savings. At this point, you'll receive information detailing the options that are available to you. Depending on the type of plan you have, you'll find three main ways to access the money you’ve saved: 

• Cash lump sum(s): take some or all of your pension as one or more cash lump sums
• Get flexible access to your savings: take the income you need when you need it
• Buy a secure income: receive a guaranteed regular income (an annuity) for the rest of your life.

Of course, there's no rush to do anything. You can make a decision when it feels right for you, and you can even take a combination of options.

Find out more about your retirement options.

What happens if I die before I start taking my pension savings?

This is a complicated area and depends on a number of different things, such as the age when you die.

You may be able to nominate someone to inherit your pension when you die, but this depends on the type of pension you have. There may also be tax to pay on an inherited pension depending on your circumstances and/or the circumstances of the person you leave your pension to.

Review the below guides for more information.

• What happens to my pension when I die?
• Can you leave a pension to your children?
• The importance of nominating your pension beneficiaries
• Changes to inheritance tax on pensions from 2027 

What pension charges might you pay?

The charge for managing your plan is known as the annual management charge. This is taken from the pension savings you’ve built up.

Your pension’s illustration will show what charges apply to your plan, when they’ll be taken, and their effect on your pension savings. These charges are regularly reviewed and could change in the future.

Can I cancel my pension plan?

You have 30 days from when you receive your plan documents to change your mind. If you decide that you don't want the plan, you should complete and return the cancellation form provided to you.

Who can I speak to if I have a complaint about my Royal London pension?

Providing our customers with excellent service is very important to us, but you can get in touch with us if there's anything you're unhappy about.

If you'd like to make a written complaint, you can write to our Customer Relations team at: 

Royal London
Royal London House
Alderley Park
Congleton Road
Nether Alderley
Macclesfield
SK10 4EL

If you're not satisfied with our response you can complain to the Financial Ombudsman at:

Financial Ombudsman Service
Exchange Tower
London
E14 9SR

Personal pensions explained

The following questions are specific to personal pensions. They’re pensions that you can apply for on your own, unlike workplace pensions that are started on your behalf by your employer.

What happens if I join my employer’s workplace pension scheme?

If you have a personal pension and you then join your employer's workplace pension scheme, you can:

• contribute to both your personal pension and your employer's workplace pension at the same time, as long as you don't exceed the annual allowance
• stop making contributions into your personal pension and leave your pension savings invested
• transfer the value of your personal pension into your employer's workplace pension – provided it's able to accept transfer payments. Transferring may not be in your best interests as you could lose valuable benefits which can't be replaced. You should speak to your financial adviser before you make a decision.

What about pension savings I’ve saved with previous employers?

If you've built up pension savings with a previous employer, you can:

• transfer the value of your existing pension savings to your personal pension. Transferring may not be in your best interests as you could lose valuable benefits which can't be replaced. You should speak to your financial adviser before you make a decision
• contribute to both pension plans, as long as you don't exceed the annual allowance
• stop making contributions and leave your pension savings invested.

Workplace pensions explained

What happens if I’m too sick to work?

If you're absent from work due to sickness or injury, you'll normally continue making contributions into your pension plan. If your employer makes contributions into the plan, you can ask them what would happen to these contributions.

What happens if I go on maternity leave?

While on maternity leave, you can continue, reduce or stop your contributions – the choice is yours. When you return to work, you can easily increase or start them back up again.

If your employer makes contributions into your plan on your behalf, you can ask them what would happen to these contributions during maternity leave. Remember that reducing or stopping your contributions will reduce the amount you get back when you retire.

What happens if I leave my job?

If you leave your job you can:

• continue to make contributions into your plan, but keep in mind that your employer’s contributions will stop
• stop making contributions and leave the pension savings you've built up invested in your plan.
• transfer the pension savings you've built up to another pension plan. 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.

For more information, visit our Pension Transfers page.

What charges might I pay?

The charge for managing your workplace pension plan is known as the annual management charge. This is taken from the money saved in your pension.

Your pension’s illustration will show you the charges that apply to your plan, when they’ll be taken, and their effect on your pension savings. These charges are regularly reviewed and could change in the future.

Find out more about costs and charges.