The amount you should pay into your pension depends on your circumstances and priorities. But please bear in mind that your employer may set a minimum contribution level. You will probably have to maintain that level of contributions in order to receive pension contributions into your pension from your employer. To help you make a good choice about how much to invest, Aviva has provided us with two calculators.
The budget calculator which lets you track your regular income and expenditure, so you can work out how much you could comfortably invest in your pension.
The pension calculator which works out how much money you might get from your pension when you take your pension benefits. You can alter the figures to see how investing more or less money could affect what you get.
If you're unsure on how much to invest, you could also contact your financial adviser.
One of the ways you can fund your retirement is by investing some money in a pension plan, which can:
A pension is a good way to invest for your retirement. You make payments into your pension pot and we will contribute too. Also, the government chips in with tax relief, which also boosts your pension pot.
Even if you receive a state pension (and any other government benefits, if you're entitled to them), it's important to bear in mind that it might not be enough to fund the lifestyle that you want. If you retire in your early sixties, for instance, you could well live for another thirty or so years. So you need to feel sure you're going to have enough money to provide you with a reasonable income during your retirement.
The more you can invest during your working years, the better standard of living you're likely to have when you retire. So the earlier you start paying into your pension, the better. By doing this, you'll be able to invest more money over a longer period of time and your pension pot will have longer to grow.
Just be aware that the value of your investment in your pension can go down as well as up and may be worth less than the amount paid in.
Funds are where your money is invested when you pay it into a pension plan. When your money goes into funds, Aviva pools your money with that of other investors and invests it with the aim of growing your pension fund. Pooled funds are a way of putting sums of money from many people into a large fund spread across many investments and managed by professionals. Investing this way can be easier and less risky than buying shares directly, for example.
With many pensions you can usually choose which funds to put your money into. There are many different types of funds, giving you plenty of options to choose from. If you're not sure which one(s) to pick, a financial adviser will be able to make recommendations for you. If you don’t make an active investment choice your payments will be invested in the default investment option we’ve chosen for our scheme.
Investment options usually differ in:
Different funds take different levels of risk. A lower risk fund might aim for steady growth over a long period of time with a low risk of losing money. A high risk fund will usually be aiming for higher long term growth but there is more risk that you might lose money.
The types of assets that a fund invests in are an important factor in the returns you’re likely to get and the amount of risk that you’re taking. A high risk fund might invest in shares of companies in either the UK or overseas which have the potential to provide good long term returns but are also likely to see large ups and downs in value. A low risk fund might invest in government bonds which normally offer lower returns but also have a lower risk of losing money.
The value of investments in any fund can go down as well as up and you might get back less than has been paid in.
Aviva will send you an annual pension fund statement around the same time of year you joined the pension scheme. This statement shows you how much you've invested to date, and the current value of your pension fund.
You can also monitor and manage your pension online at any time using Aviva's Pension Tracker. Find out more about Pension Tracker
Once you've paid money into your pension pot, you won't be able to access it until you are at least age 55, except in exceptional circumstances.
It is important to remember that there are two separate stages to a pension plan. The first is the pot of money you build up in your pension plan from the payments you invest. The second is the retirement benefits you provide yourself from the pension pot you have built up.
When you reach your chosen retirement age, you can choose to take your retirement benefits in one or any combination of the following ways:
We'll write to you before your chosen retirement date to let you know what your options are. You can also find out more in our 'Retirement centre' at aviva.co.uk/pensions-and-retirement/retirement-centre
With pensions there are a couple of things to bear in mind. Although the aim of a pension plan is to grow the amount of money you invest in your pot, the value of your investment can go down as well as up and may be worth less than the amount paid in. Also, you need to be aware that tax rules may change, so the rules around tax relief may change.
Help is always at hand if you have any questions about your pension, or if you want to make any changes to it. Visit the contact page to find out who you need to speak to.
If you want to manage your pension yourself, you can do it online using Aviva's Pension Tracker. It lets you see how much your pension fund is worth and request changes to your pension. Find out more about Pension Tracker
Aviva are the company we've chosen to provide our company pension scheme. You can find out more about them on Aviva our pension provider
If you already have another pension plan (perhaps from a previous employer), you may be able to:
The choice is yours. There's no pressure to move your existing pension fund and there are no guarantees you'll be any better off by transferring, however you can decide what will work best for you. If you do think moving your existing pension is an option for you, we recommend you seek independent financial advice to make sure that you won't be losing any valuable benefits or guarantees that your existing scheme may provide.
You can find further details of where to go for advice on the contacts page.
See how your pension is performing through Pension Tracker, available on MyAviva
Find out more about Aviva.