If you are in classic, classic plus, premium or nuvos, you may choose to buy added pension to top up your pension benefits. You can buy added pension by making monthly contributions from your pay and/or by paying in a lump sum
When considering added pension we suggest you read the added pension leaflet and use the calculators to see how much you want to buy and how much it will cost
You cannot buy added pension after you have left the scheme
New Entrants
If you have joined your organisation in the last 12 months, please contact your Pension Service Centre about your eligibility to buy added pension. You can find their contact details from the link below.
Select your employer from the helplines A-Z and this will present the correct contact details
Please see the added pension calculator, which illustrates the costs. If you cannot access the calculator, contact your Pension Service Centre.
You can find your Pension Service Centre details from the link below.
Select your employer from the A-Z and this will present the correct contact details
Added pension by monthly contributions If you want to buy added pension by monthly contributions for scheme year 2011-12, you must send the completed form to your Pension Service Centre by 26th February so that they have time to instruct your payroll to start making deductions from your April salary. If your application reaches the Pension Service Centre after this date there is the possibility it will not be processed in time. You can either pay a set amount or a set percentage of your pensionable pay.
When you take your pension, your added pension will be combined with it.
See your scheme booklet for details on how your pension is worked out – you will find this in your scheme guide .
Index linking
The Government announced a change to the index linking for public sector pensions in the Budget last year, from the Retail Prices Index to the Consumer Prices Index, effective from April 2011. The amount of added pension you buy is increased each year until you take your pension. It is increased at the end of each scheme year (31 March) by the amount of the Consumer Price Index at September in the previous year.
- added pension application form for classic, classic plus and premium members
- added pension aplication form for nuvos members
Please note
Paying by lump sum You can make one lump sum payment at any time in the year through your salary. If you want to make a payment you must send the completed form and payment to your Pension Service Centre by 18th February. Your payroll needs to be told in time to deduct the money from your March salary. If your application reaches the Pension Service Centre after this date it is possible it might not be processed in the current scheme year.
If you want to make a lump sum payment other than through your salary, (i.e. by cheque) please contact your Pension Service Centre as soon as possible.
Added pension by monthly contributions If you want to buy added pension by monthly contributions for scheme year 2011-12, you must send the completed form to your Pension Service Centre by 26 February 2011 so that they have time to instruct your payroll to start making deductions from your April salary. If your application reaches the Pension Service Centre after this date there is the possibility it will not be processed in time.
You can either pay a set amount or a set percentage of your pensionable pay
In general, you can get tax relief on pension contributions of up to 100% of your taxable earnings, or £3,600 if you earn less than that.
- So a contribution of, say, £100 would have a net cost to you of £80 if you pay income tax at standard rate (or £60 if you pay tax at higher rate).
Please note
Buying added pension, particularly by lump sum, will increase the value of your pension from one year to the next, and you could potentially become liable to an Annual Allowance tax charge. Defined benefit pension schemes such as classic, classic plus, premium and nuvos are valued by multiplying the pension built up in the year by 16 and adding the increase in any automatic lump sum over the year. The calculation includes a measure to ease the effect of inflation. The Annual Allowance tax charge will normally only affect those high earners on a salary in excess of £100,000. However, if you receive a promotion or large pay rise above the level of inflation then this will increase the value of your pension in that year, and so may limit the amount of added pension you could buy without incurring a tax charge. The Annual Allowance limit was reduced in 2011 from £255,000 a year to £50,000 a year.
If you do exceed the Annual Allowance you can offset the excess against unused Annual Allowance from the previous three years. The HM Revenue and Customs website contains guidance and details of how the rules apply. www.hmrc.gov.uk/pensionschemes
Please see the added pension calculator which illustrates the costs - If you cannot access the calculator, contact your Pension Service Centre.
If you want to buy your added pension other than through your salary, your contributions will not get automatic tax relief. To get tax relief you will need to tell HM Revenue and Customs about your lump sum payment by making a tax return for the year in which you are buying.
Please speak to your pension service centre if you want to pay other than though your salary.