If you have a question about the Scheme or pensions in general, please check for the answer in some of these frequently asked questions. Otherwise, please contact us with your query.
Pensions in general
What is a pension?
A pension is a tax-efficient way of saving money that you can use to live on when you’re no longer working. In a workplace pension, like the NFU Mutual Retirement Benefit Scheme, both you and your employer pay into the scheme.
What are the different types of pension?
There are lots of different types of pension schemes. Workplace pension schemes are set up by employers to help their employees save for retirement. Both you and your employer pay into this type of pension. With workplace pensions, you can get defined contribution (DC) schemes and defined benefit (DB) schemes. The NFU Mutual Retirement Benefit Scheme has a DC Section which is open to new members and a DB Section, which is closed to new members.
You can also join a personal pension, where you pay into the pension but your employer doesn’t.
Why should I be in the Scheme?
All eligible employees are automatically enrolled into the Scheme and there are a lot of good reasons to be in your workplace pension. Firstly, NFU Mutual helps you save for retirement by paying money into your personal account (on top of the money you pay in yourself). If you opt out of the workplace pension scheme, you wouldn’t get this extra contribution.
Another reason to stay in the Scheme is that the government wants to help people save for their future, so you don’t pay tax on your pension contributions. This means it costs you less than you might think. If you’re a basic-rate taxpayer, every £1 you pay into your pension actually only costs you 80p. Paying your contributions using SMART further reduces the cost of every £1 to 68p.
In addition to this ‘free money’, being in a workplace pension is easy. NFU Mutual sets it all up for you, so you don’t have to think about setting up direct debits or any of the other hassles you might have in taking out a personal pension.
As a member of the Scheme, while you’re employed by NFU Mutual, you’ll also benefit from valuable cover in the form of ill-health early retirement or death-in-service spouse’s benefits.
If you aren’t automatically enrolled into the Scheme, you can apply to join the Scheme at any time.
Will I get a State pension?
Your entitlement to a State pension depends on how many qualifying years of National Insurance (NI) contributions you’ve got. To receive any State pension at all, you must have a minimum of 10 qualifying years. To get the full State pension, you’ll need to have 35 qualifying years. If you have between 10 and 35 years of NI contributions, you’ll get a proportionate amount of State pension. To find out how much you’re entitled to, you can use the government website to check your State pension.
What is automatic enrolment?
The law requires employers to automatically enrol eligible employees into a workplace pension and that both the employer and employee make contributions towards it. Once enrolled, employees have the option to leave the Scheme (opt out).
If you opt out of the Scheme, NFU Mutual will have to automatically re-enrol you every three years or when you reach a certain age or salary levels.
If you aren’t eligible to be automatically enrolled, you can choose to join the Scheme at any time.
If you’ve been automatically enrolled, you can still choose to pay a higher contribution rate or select a different investment option at any time while you’re in the Scheme.
About the DC Section
How does the DC Section work?
While you’re a member, you build up a pot of money in your personal account during your employment, made up of contributions from you and NFU Mutual. These contributions are invested with the aim of increasing your personal account over time.
Who should I contact if I have a question about my pension?
Contact the Scheme administrator, Trafalgar House.
Who runs the NFU Mutual Retirement Benefit Scheme?
The Scheme is run by a corporate Trustee called NFUM Pension Trustee Company Limited. It has five Trustee Directors: three appointed by the Company and two nominated by the members of the Scheme.
How do I know how much my personal account is worth?
Your annual benefit statement summarises the contributions paid into your personal account by you and by NFU Mutual, how your investments have performed, your prospective pension at retirement (assuming you buy an annuity), and your death benefits. You can check the value of your personal account at any time by logging in via My Work Pension. You can also log into your personal account via My Work Pension to use the retirement modeller.
Can I opt out of the Scheme?
New eligible employees are automatically enrolled into the DC Section following the first full month of working for NFU Mutual, but it’s not a condition of your employment to be or remain a member of the Scheme. If you’ve been automatically enrolled and you’re still within your AE opt-out period, details of how to opt out are included in your enrolment letter which you should receive from NFU Mutual around the time that your first contribution is deducted. Please note that it is not possible to opt out until you have received this notification letter. If you’re no longer in your AE opt-out period or you weren’t automatically enrolled, you can download a Scheme opt-out form by logging on to your My Work Pension account.
How can I make a complaint?
If you have a complaint, please contact the Scheme administrator, Trafalgar House in the first instance.
If your complaint can’t be resolved by the administrator, the Scheme has a formal internal dispute resolution procedure (IDRP) that you can use. The administrator will provide you with further details of this.
How much does it cost?
The minimum member contribution is 4% of your pay. Your contributions are eligible for tax and NI relief, so each £1 you save costs 68p (for a basic-rate taxpayer).
|You pay||NFU Mutual pays||Total paid into your personal account|
|8% or more||12%||20% or more|
What happens to my contributions?
The money paid in by you and NFU Mutual is added to your personal account and invested.
What is SMART?
Also known as salary sacrifice, SMART stands for save money and reduce tax. It’s a way of paying into your pension which reduces the cost of your contributions to you by making National Insurance (NI) savings. NFU Mutual makes a contribution on your behalf into your personal account and then reduces your salary by the same amount.
Do I have to pay contributions using SMART?
Most members do pay into their pension the SMART way. However, it’s not suitable for everyone and you can choose to pay your contributions via deduction from salary instead, but you won’t make National Insurance savings.
You can’t pay the SMART way if it would result in reducing your salary to below the National Minimum Wage (or National Living Wage, if you’re over 25). It’s also not possible to sacrifice statutory pay, for example maternity, paternity, adoption or sick leave.
Can I pay in more than 4%?
Yes, you can pay up to 100% of your salary in any month if you wish, but NFU Mutual will only double match your additional contributions to a total maximum of 12%. You should also be aware that the Annual Allowance puts a limit on tax-free pension contributions, which for most people is £40,000 but for some could be as low as £4,000.
What is the Annual Allowance?
The annual allowance (AA) is a limit on the amount of tax-free contributions you can save each year. The standard AA is currently £40,000.
Your AA may be reduced and could be as low as £4,000 if you’re a high earner and have income from all sources over £200,000 a year.
What is the Lifetime Allowance?
This is a limit that the government places on the total value of tax-efficient pension savings you can build up over the course of your working life from all sources including the Scheme (but excluding the State pension). It’s currently set at £1,073,100 until April 2026.
Can I change my contribution rate?
Yes, you can change your contribution rate by going to My Reward Hub. Any change you submit before the 25th of the month will take effect from the 1st of the following month.
How are my contributions invested?
The contributions from you and from NFU Mutual are invested in your choice of lifestyle investment strategy or in your chosen self-select funds. The value of your personal account can therefore go down or up at any point in time depending on the performance of the financial markets. If you don’t make an investment choice, your personal account will be invested in the default strategy, the Drawdown Lifestyle strategy. You can see how your contributions are invested by visiting My Work Pension.
What are my investment choices?
You can choose one of the lifestyle investment strategies if you prefer not to be involved in day-to-day investment decisions. Currently this is the option that the majority of members use.
Alternatively, if you don’t think a lifestyle strategy is appropriate for your circumstances and you’d like to manage your personal account more actively, you can choose to invest in the range of self-select funds.
If you don’t make an investment choice, your personal account will be invested in the default strategy, the Drawdown Lifestyle strategy.
Can I use a lifestyle strategy and a self-select fund?
No, you can’t invest in both at the same time. If you choose a lifestyle strategy, 100% of your personal account must be invested in this way.
Can I change my investment choices?
Yes, you can make changes to the way your personal account is invested at any time. Simply log into your personal account via My Work Pension.
What’s my selected retirement age?
This is the age at which you plan to take your Scheme benefits. If you’re still working for NFU Mutual, it can be any age after 55. If you’ve left NFU Mutual, you can’t defer taking your benefits after age 60 (or the date you left NFU Mutual if later). It’s really important to tell us your selected retirement age so that the transition phase of the lifestyle strategy (the gradual de-risking of your personal account) matches when you want to retire.
Where can I get financial advice?
The Trustee can’t give you financial advice. If you need further information and guidance, you can speak to one of the NFU Mutual Staff Financial Advisers. You can also find useful information about pensions and retirement at the Money and Pensions Service which is the government’s free financial guidance service. Alternatively, you can find an Independent Financial Adviser local to you at www.vouchedfor.co.uk or www.unbiased.co.uk.
When can I retire?
If you’re still working for NFU Mutual, you can take the money that has built up in your personal account at any time from the age of 55. Please see the HR early retirement policy for more details about retiring early. If you’ve left NFU Mutual, you can’t defer taking your benefits after age 60 (or the date you left NFU Mutual, if later). Please note that the government is planning to raise this minimum retirement age to 57 by 2028.
How much will my pension be?
The DC Section is a defined contribution pension scheme which means that you won’t know exactly how much your benefits will be until you retire. It depends on how much money has been paid into your personal account in the form of contributions, how your investments have performed and the choices you make at retirement.
Your annual benefit statement will give you an estimate of your prospective pension at retirement (based on buying an annuity). You can also log into your personal account via My Work Pension to use the retirement modeller.
Can I take my benefits and continue to work?
Yes, if you’re still working for NFU Mutual, you can access your benefits at any time after the Scheme’s normal retirement age of 60 and continue to work. However, once you have accessed your DC benefits flexibly, either through taking a lump sum or income drawdown, if you continue to save into a new pension, the amount of tax-free pension contributions you can make is restricted to £4,000 a year.
What are my retirement options?
You can take up to 25% of your personal account as a tax-free cash lump sum. You can then use the rest to provide a taxable income in the way that suits you. You can choose to set up a drawdown account, purchase an annuity or take cash.
What’s income drawdown?
Income drawdown allows you to transfer your Scheme savings to a new provider at retirement, keep your money invested and then draw a taxable retirement income from it.
What’s an annuity?
An annuity is an insurance product that pays a guaranteed income for life. There are several options for how the annuity may work, which influence how much it could cost. For example, you might have a flat-rate annuity or one that increases each year with inflation.
What happens to my personal account if I die?
If you die after leaving the Scheme but before taking your benefits, the full value of your personal account will be used to provide benefits for your nominated beneficiaries.
If you die while you’re making payments into your personal account, a benefit would be payable to your spouse or your children. The value of your personal account at the date of your death would be used to provide an income for your spouse or children, but it will be enhanced in order to provide a fund which would be equivalent to an income of 1% of your pensionable salary for the number of years between the date that you joined the Scheme and your 60th birthday. If you don’t have a spouse, the whole of your personal account may be used to provide a pension for any children or other dependants you have.
There is also a separate lump sum death-in-service benefit of four times your base salary for active employees provided by NFU Mutual.