FAQs for Members

If you’re struggling with money due to the COVID-19 pandemic, you’re not alone. Help is available. We’ve listed some resources and contact details for organisations that can help you deal with your money worries.

Where to find help
The government’s Money Helper service has a Money Navigator tool that’s a useful place to start. Answer some simple questions about your finances and you’ll be pointed towards resources to help you plan, budget, claim any benefits you’re entitled to and start to deal with any debts you have.

The independent moneysavingexpert.com website’s Coronavirus Guides section covers help with bills, renting and mortgages, furlough and sick pay, and claiming benefits.

Citizensadvice.org.uk has guidance in its debt and money section. And you can chat to an adviser online.

Talk to your bank
Talk to your bank, building society, mortgage lender or any other organisation you’ve got a financial arrangement with. Ask what help is available – such as payment holidays, overdraft arrangements or temporary access to savings accounts.

Can you claim extra money?

Debt help
These organisations offer free help and support with debts and money worries. You can chat to an adviser online.

Pension information
These organisations offer free information and guidance about pensions (but they don’t offer independent financial advice).

Independent financial advice
You can pay for specific advice, tailored to you, that recommends what you should do. The following organisations can help you find a financial adviser (but won’t recommend one).

Watch out for scams

Please treat any offers of free help with your pension – even if they claim to be from a government-backed organisation like Pension Wise – with care. They could be scams. Pension Wise won’t contact you unless you get in touch with them.

You should also look out for ‘phishing’, where scammers try to get your personal details by sending emails or texts that look like they’re from a legitimate source (such as your bank, HM Revenue & Customs, PayPal or Amazon) and asking you to click on a link in the message. You should never click on these links – instead, go to the organisation’s website and log in there.

You may be tempted to take some cash out of your pension savings to tide you over in the short term – but you should think seriously about the possible effects on your pension savings and future income before doing this.

Your future income could be smaller
Taking money from your pension savings now will reduce the amount you’ll have to live on in future.

You could pay more income tax
Only one-quarter of the cash you take is tax-free and you’re liable for income tax on the other three-quarters.

Depending on your circumstances, this could put you into a higher tax bracket for the year – meaning you’d pay even more tax.

You could lose most of your tax-free allowance for future pension saving
Pensions are a tax-efficient way to save, but taking cash from your pension savings now could make your future savings less tax-efficient.

You can contribute up to 100% of your salary towards your pension savings and still get tax relief, as long as the combined contributions from you and your employer are below the annual allowance. This applies to all the pensions you’re actively saving into, including now:pensions and any personal pensions you have. It doesn’t apply to your State Pension.

For most people, the current annual allowance is £60,000 for the tax year 2024-2025. If you go over this you’ll have to pay tax on the amount over the allowance.

If you start taking money out of your pension savings while you’re still paying in to them, the money purchase annual allowance – currently £10,000 a year – could affect you. This means the total amount you and your workplace can pay into your pension savings and still get tax relief goes down to £10,000 a year.

See What is the money purchase annual allowance for pension contributions? for more information.

Only if you’re over 55. If you’re under 55 you can’t legally get hold of your pension savings. This is because pension savings are ‘ring-fenced’ to be used as retirement income.

The government is planning to increase the earliest age you can get at your pension savings to 57 by 2028. The idea is that it stays 10 years behind State Pension Age, which will be 67 by 2028.

Beware of scams
Don’t believe anyone who says you can access your pension savings before 55 without any penalties. It’s a scam. If you try, you’re also likely to face an additional tax bill as HM Revenue & Customs would treat it as an ‘unauthorised payment’.

Even if you are over 55, you should think very carefully before dipping into your pension savings to tide you over in the short term.

Your future income could be smaller
Taking money from your pension savings now will reduce the amount you’ll have to live on in future.

You could pay more income tax
Only one-quarter of the cash you take is tax-free and you’re liable for income tax on the other three-quarters.

Depending on your circumstances, this could put you into a higher tax bracket for the year – meaning you’d pay even more tax.

You could lose most of your tax-free allowance for future pension saving
Pensions are a tax-efficient way to save, but taking cash from your pension savings now could make your future savings less tax-efficient.

You can contribute up to 100% of your salary towards your pension savings and still get tax relief, as long as the combined contributions from you and your employer are below the annual allowance. This applies to all the pension schemes you’re actively saving into, including our Scheme and any personal pensions you have.

From 6 April 2023 the allowance increased from £40,000 to £60,000.

The annual allowance could reduce to £10,000 a year if you start taking retirement benefits but also carry on saving into a pension. This reduced annual allowance is called the money purchase annual allowance.

See What is the money purchase annual allowance for pension contributions? for more information.

No. The minimum contribution rates for workplace pensions are specified by law. The current minimum is 8%, at least 3% of which must come from your employer. You make up the rest.

To temporarily stop paying contributions for any length of time, you’ll need to cease active membership of the now:pensions Trust (the ‘Scheme’).

You can do this by logging into our member website. Simply click the ‘Opt-out button’ and complete the relevant forms.

Or, you can contact our member support team for a paper copy of the opt-out form. You will also need to tell your employer you’re leaving the Scheme.

Your employer will stop paying contributions at the same time you stop paying contributions.

To re-start your contributions in three months’ time (or whenever you choose), you’ll need to rejoin the Scheme (this is in line with pension regulation).

You can opt back in at any time by logging into our member website and clicking on the ‘Opt-in’ button. Or, you can contact our member support team for a paper copy of the opt-in form.

Make sure you let your employer know when you opt back into the scheme, so they re-start their contributions. Your employer will also be notified through our employer website. However, any contributions paid in so far will remain in the scheme.

If you don’t have your now:pensions contract ID, you can email us with your full name and NI number. We can find your pension information with these details. 

To temporarily stop paying contributions, you’ll need to cease active membership of the now:pensions Trust (the ‘Scheme’).

You can do this by logging into our member website. Simply click the ‘Opt-out button’ and complete the relevant forms.

You can also contact us for a paper copy of the opt-out form.

Your employer will also stop paying their contributions at the same time. However, any contributions you’ve paid in so far will remain in the Scheme.