Now: Pensions - how it works

What is Now: Pensions?

Now: Pensions is a type of pension scheme that employers use to enrol their staff into a pension.

It is a 'master trust', which has an independent board of trustees who are responsible for decisions on how your pension is invested, how much you're charged and the administration of your pension.

This guide explains what you need to know about Now pensions, how much you'll be charged and where you can invest your pension savings.

How do master trusts work?

A master trust is a type of defined contribution pension that can be used by multiple employers - with independent trustees who look after pension savings on behalf of all the employees who are members.

So you might find that you have the same pension as your neighbour, even though you work for different companies.

Although the major decisions are taken by the master trust, your employer can still make decisions about contributions, investments, and benefits.

Many employers have chosen to use a master trust pension scheme to automatically enrol their staff into a pension, rather than set up and run their own workplace pension scheme.

How much can you pay in via Now: Pensions?

The government sets the minimum amount you must contribute to a pension, and this will apply if your employer uses Now: Pensions.

The table below shows these minimum contributions for both this tax year and the next. Find out how this works in more detail in our guide to pension auto-enrolment.

Other people, such as family and friends, can also pay into Now: Pensions for you.

Like all other workplace pension schemes, you'll receive tax relief on pension contributions from the government. So the minimum employee contribution is effectively 4%. 

What are the charges with Now: Pensions?

Now: Pensions combines an annual investment charge with a monthly administration charge. You pay £1.75 per month, with an annual investment charge of 0.3%.

Say you were to pay in £100 into your pension each month - £97.95 would be invested into your pension after charges.

Can I transfer my Now: Pension savings?

Transferring out

You can transfer your pension money away from a Now: Pension fund.

If you are transferring away from Now: Pension, the pension you're transferring to must confirm it can accept transfers in (ie another registered pension scheme or a qualifying registered overseas pension scheme, or QROPS) and provide the appropriate HMRC scheme reference.

You should consider taking professional pension advice before switching your pension.

Transferring in

You can transfer other pension pots into Now: Pensions. There is no charge to do so.

To transfer existing pensions or add a personal pension to your Now: Pension, contact member support on 0330 100 3334 and request to make a transfer.

Where can I invest my savings with Now: Pensions?

Now: Pensions invests your money into something called its 'Diversified Growth Fund' during the 'growth' phase of saving for retirement. This is the period when you're at least 10 years away from retirement.

The fund aims to provide stable growth over the long term by spreading your money across different investment areas which tend to perform differently in different economic conditions (eg cash, government bonds, corporate bonds, equities, alternative investments).

When you are 10 years away from retirement, your funds are gradually switched from the Diversified Growth Fund into the Retirement Countdown Fund.

This fund is designed to generate returns similar to those available from savings accounts, by investing predominantly in cash deposits and money market funds.

By doing so, your savings are protected from potential falls in investment markets at a time when, being so close to retirement, you don't have the capacity to make up the losses.