WHAT DIFFERENCE DOES 1% MAKE?

Watch this video to see what difference and extra 1% contribution can make.

Disclaimer: This video provides an estimate of the difference to the value of a member's pension account at retirement (age 68) should they pay an Additional Penwise Contribution of 1% of salary from age 21 to age 68 to boost their pension account. This figure is an estimate based on a number of investment and other assumptions and should not be relied upon. The actual value of the pension account at retirement will depend on many factors and be quite different from the amount shown.

To have a fulfilling retirement, you need to have the money to do so. That’s why it’s important to start contributing as soon, and as much, as you can. Over time, your contributions will have a chance to grow, giving you the opportunity to maximize your retirement income. See the Retirement Living Standards which show you what life in retirement looks like at three different levels of income.

When you contribute, you benefit from contributions from DHL as well. But you also benefit from tax savings: pension contributions are made pre-tax, which means your tax and National Insurance (if you’re in Penwise) are calculated after your contributions are taken into account, which results in you paying less.

Download the DC Additional Voluntary Contributions form here

How much can you afford to contribute?

Your summary leaflet will tell you how much DHL will contribute to your pension account and you can contribute more by paying Additional Penwise Contributions (APCs).

Check out the Money Helper’s workplace pension contribution calculator about how much you and DHL will contribute, and what this means for your income.

How to change your contributions?

Tax savings

Currently, you can get tax relief on the contributions you make to your pension account.

You can normally contribute up to £60,000 a year and still benefit from tax relief (although this can reduce to as low as £10,000 for individuals whose total income (including retirement savings) over the tax year is more than £260,000). This £60,000 is called the Annual Allowance and is set by the Government. If your total contributions into all your registered pension arrangements go over the Annual Allowance in a year, they would then be taxed at the highest rate that applies to you. If you have already taken your savings from a previous DC pension arrangement, your Annual Allowance will generally be significantly lower.

Please visit this government website for further information and the current allowances https://www.gov.uk/tax-on-your-private-pension

National Insurance savings

We have a tax-saving scheme called Penwise that you can also use to contribute into your pension account.

Instead of paying a percentage of your salary into your pension account, you instead agree to have your salary reduced by that amount and DHL pays that into your pension account for you. This means the same amount of money goes in, but because your salary is reduced by the amount of the pension contributions you will pay less tax and keep more money yourself.

More information is available in the Penwise guide.