FAQs
Glossary
Additional contributions | Additional contributions made through Options in return for a reduction in your remuneration, which is known as salary sacrifice. This will provide additional benefits at retirement. |
Additional voluntary contributions (AVCs) | These are the additional contributions that you may have made to the Scheme by deduction from your salary to provide additional benefits at retirement. This will have been made either before Options was introduced or because it was inappropriate to pay contributions via salary sacrifice. |
Annual allowance (AA) | The maximum amount which can be contributed to UK pension arrangements each tax year on a tax efficient basis. Visit the MoneyHelper website for the current limit. |
Base salary | Your annual salary, excluding variable earnings (such as bonuses and fringe benefits) and ignoring any adjustments as a result of your participation in Options. |
Company
| Schroders plc or, as appropriate, any of the companies participating in the Scheme. |
Core contributions | The contributions that the Company credits to your individual account, whether or not you decide to contribute. |
DC section | The defined contribution section of the Scheme. |
Earnings cap
| The maximum base salary that will count for the purposes of contributions to the DC section. The current earnings cap is £250,000 per year. This can be changed by the Company at any time. |
Options | The benefits system operated by the Company. |
HMRC | HM Revenue and Customs |
Individual account | The account set up in the DC section in your name. |
Matching contributions | The additional contributions that the Company may credit to your individual account (up to a limit) if you decide to make additional contributions. |
Qualifying service | Your period of employment since joining the Scheme, plus qualifying service under any other pension scheme from which a transfer payment has been made into the Scheme. |
Salary sacrifice | An arrangement by which the Company will make additional contributions to the Scheme on your behalf in return for a reduction in your salary. |
Scheme | The Schroders Retirement Benefits Scheme. |
State Pension age | This is the earliest age you can start receiving your State Pension from the government. For those born after 5 April 1960, there will be a phased increase in SPA to age 67, and eventually 68. Please be aware that the SPA may change in the future. |
FAQS
Pensions can be complicated, so it’s natural you’ll have questions about yours. These Frequently Asked Questions (FAQs) are designed to answer the most commonly asked questions about the defined contribution (DC) section of the Schroders Retirement Benefits Scheme (the Scheme).
If you can’t find the answer to your question here – or elsewhere on the website – please contact Aptia.
What is a pension?
A pension is a long-term and tax-efficient way of saving money during your working life. It helps you build up funds to provide an income for your retirement.
What is a DC pension scheme?
A DC pension scheme enables you to build up an individual pension pot - your ‘individual account’. You then use that money to ‘buy’ your pension benefits when you retire. Visit What is a pension? for further information.
How do I enrol in the DC section?
All eligible employees are automatically enrolled into the DC section, which means an individual account will be set up in your name. If you’ve opted out and want to re-join, please contact the Pensions Team.
Who pays the contributions?
Currently, Schroders makes a core contribution of 16% of your base salary into your individual account every month. There is no cost to you. If you want to, you can make additional contributions from your salary through Options, which is Schroders' benefits system. If you do choose to make additional contributions, Schroders will match them, up to an additional 2% of your salary. Visit the Our DC pension scheme page for further information.
Do I have to make monthly contributions?
You don’t have to pay contributions, but you can if you wish. If you want to, you can make additional contributions from your salary through Options, which is Schroders' benefits system. If you do choose to make additional contributions, Schroders will match them, up to 2% of your salary. Any additional contributions you make will be made through salary sacrifice. You can also choose where the money from your individual account is invested – the DC section offers multiple investment options. Visit the Our DC pension scheme page for further information.
What is salary sacrifice?
When you make additional contributions, Schroders pays them into your individual account on your behalf, in return for a reduction in your salary. This means you save on income tax and National Insurance on any additional contributions you make.
Why is saving for retirement important?
Saving for retirement helps ensure you have enough money available when you stop working or if you reduce your working hours in later life. The earlier you start saving, the more time your investments have to grow. Visit the Why saving for retirement is important page for further information.
At what age can I retire?
The current minimum pension age set by the government is 55. This is set to increase to age 57 from April 2028, and may increase again in the future.
How do I know if I have saved enough?
You can use the Pensions and Lifetime Savings Association’s (PLSA) retirement living standards to work out how much money you’re likely to need in retirement, and how much you need to save now to reach that target. You can also use the modelling tool on Aptia OneView to get an example of what your income might look like at your chosen retirement date and how this might change when you adjust certain variables, for example retiring later or increasing your contributions.
Can I choose how I take my pension when I retire?
Yes - when you reach your retirement age, you can choose to take the money from your individual account using three different options, or a combination of all three. Visit the Your retirement options page further information.
What are the options?
- A cash lump sum – where the first 25% is tax-free
- A flexible monthly income
- A guaranteed income for life (known as an annuity)
- You can also combine the three options to a retirement package that suits you best
If you have a DB section pension as well you may be able to use your DB and DC pension savings together. Aptia will provide you with details if you ask them.
What happens if I leave Schroders before retiring?
Your money will remain invested in your individual account, unless you choose to move the funds into another pension arrangement. In both instances, Schroders will stop paying into your pension, and any additional contributions you make from your salary will also stop. Whilst your individual account remains in the Scheme you’ll be able to view its value and make investment decisions, as well as other changes, in Aptia OneView. Visit the Your retirement options page for further information.
Can I retire early?
The normal retirement age in the DC section is age 60, but the minimum pension age set by the government is age 55. This is set to increase to age 57 from April 2028, and it may increase again in the future. That’s the earliest age you can start taking your benefits.
What happens to my pension if I keep working at Schroders after age 60?
You can delay pension payments until your actual retirement date, which means that any contributions made to your individual account will continue. You also have the option to keep working and take your pension at the same time. Visit the Your retirement options page for further information.
What happens to my pension if ill-health prevents me from working?
If ill-health prevents you from continuing your employment at Schroders on a permanent basis, you may be able to access the money from your individual account before the age of 55. You’ll need to provide medical evidence to access this option. Visit the Your retirement options page for further information.
What happens if you die after you stop working at Schroders but before you retire?
If you die after you’ve stopped working for Schroders, or before you take your pension benefits, the value of your individual account will be paid to your beneficiaries as a lump sum. You’ll need to ensure you complete an Expression of Wish form to tell the Trustee who you want your money to go to. Visit the Looking after your loved ones page for further information.
What happens if you die while working at Schroders?
If you die while employed by Schroders, or before you take your pension benefits, the value of your individual account will to be paid to your beneficiaries as a lump sum. You’ll need to ensure you complete an Expression of Wish form to tell the Trustee who you want your money to go to. Visit the Looking after your loved ones page for further information.
Can I transfer funds out of my pension?
When you reach retirement age, or if you leave Schroders before retiring, you’ll have the option to move your savings elsewhere. We recommend seeking professional guidance from an independent financial adviser to assess the risk involved. You will need to meet these costs. You can visit the MoneyHelper website to find an adviser local to you. Visit the Tracing and transferring old pensions page for further information.
Can I transfer funds into my pension?
If you have any savings in another pension arrangement, for example from a previous employer, it may be possible for a transfer value to be paid into your individual account in the DC section. This is subject to certain conditions and is at the discretion of the Trustee. Visit the Tracing and transferring old pensions page for further information.
If I pay into a DC pension scheme, do I still receive a State Pension?
Yes. The State Pension is received from the government as a regular payment. Most people can claim the State Pension when they reach their State Pension age. This isn’t the same as your retirement age and varies according to the year you were born and your gender. The amount you receive is also dependent on your National Insurance record. Visit the State Pension page for further information.