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 of £40,000 for most people.

Taking cash out of your pension savings can reduce this allowance to £4,000 a year – and this includes your employer’s pension contributions as well as yours. In other words, if you and your employer pay more than £4,000 a year into your pension savings in the future, you’ll pay tax on the amount over £4,000.

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 of £40,000 for most people.

Taking cash out of your pension savings can reduce this allowance to £4,000 a year – and this includes your employer’s pension contributions as well as yours. In other words, if you and your employer pay more than £4,000 a year into your pension savings in the future, you’ll pay tax on the amount over £4,000.

Yes. The pension assets are held in a separate trust overseen by a trustee company which looks after members’ interests, so it will be safe if your employer becomes insolvent.  However, the value of your pension savings can still be affected by changes in the investment markets during the pandemic.

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.

No. The auto enrolment thresholds remain the same for eligible, non-eligible and entitled employees, regardless of who is paying their salary. If you have already been enrolled into your employer’s workplace pension, you’ll remain a member of the scheme.

If you’re a new employee, and you’re receiving 80% of your salary, you might not meet the eligibility criteria for auto enrolment.

Yes. Your employer is still required to pay pension contributions while receiving government support. 

The contribution rate will also remain the same – for example, if your employer usually pays 3% of your earnings, they will continue to pay that amount, and you’ll pay the remaining 5% to make up the total minimum of 8%.

If your earnings are less than normal, the amount of deductions will change accordingly.

No. Your employer isn’t allowed to influence any of your decisions about your workplace pension. This is known as ‘inducement’ and there’s a law against it to protect you.

If you decide to stop paying into your workplace pension, this must be your decision.

For this reason, your employer can’t provide you with you opt-out forms, ask or encourage you to leave the scheme. If you feel you’re being pressured to leave the scheme, please contact The Pensions Regulator.

Yes. Any money that has been paid into, and invested in, your workplace pension is yours and will remain so, regardless of what happens to your employer. None of your contributions, nor your employer’s contributions can be refunded to your employer.

You can leave your pension where it is or transfer your savings into another suitable pension.

If you’re aged 55 or over, you can take your pension.

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.

Yes. When you want to re-start paying pension contributions, you’ll need to rejoin the Scheme. You can opt back in at any time by logging into our member website and clicking on the ‘Opt-in’ button. You can also contact us 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.

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.

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

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

You can opt back into the scheme when you’re ready. 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.

If you don’t rejoin, you may be automatically re-enrolled at your employer’s next re-enrolment date. This occurs once every three years.

No. You need to be aged 55 in order to access your pension savings. This is a legal requirement set down by government to make sure that pension funds are used to support you in later life.

Once you’ve reached age 55 you can access your pension at any time, even if you specified a later retirement age when you originally started your plan.

For NOW: Pensions members the only exception to this rule is if you’re seriously or terminally ill and you’re totally unable to work as a result of your illness. If you find yourself in this situation, please email us at membersupport@nowpensions.com and we can talk to you about your options. You don’t need to use a third-party pension release company to arrange this.

Pension transfers
You can also transfer your pension savings to another suitable pension provider. However, they will not be able to give you access to your money any sooner than we’re allowed to.

Transferring out of a pension is a big decision. For free and impartial guidance about your pension savings, please visit or contact Pension Wise or call 0800 138 3944 to book a phone or face-to-face appointment.

Pension Wise will provide you with information, but not advice.

Before you make any decision about transferring your pension savings, we recommend you take independent financial advice. The adviser will need to be authorised to give advice on pension transfers.

Watch out for pension scams
Anyone who tells you that they can get you access to your pension before age 55, other than in the serious ill health case mentioned above, will be a pension scam and not authorised by The Pensions Regulator or the Financial Conduct Authority.

There has been an increase in scams since the pandemic, as savers may be looking to transfer pension savings while markets are unstable. Victims of pension scammers are likely to lose all of their money. Find out more about how to protect your pension here.

You can also find out about how to protect your savings from pension fraud on The Pensions Regulator and the Financial Conduct Authority websites.

A salary sacrifice arrangement is a contractual agreement between you and your employer where you agree to give up some of your salary (‘the sacrifice’) in return for a benefit from your employer, such as a pension contribution. These schemes vary between different organisations so details of your agreement will be set out in your terms and conditions of employment.

Your original salary, before your pension contribution is deducted, is known as the ‘pre-sacrifice salary’ and your reduced salary after sacrifice is your ‘post-sacrifice salary’.

Your furloughed pay will be based on the post-sacrifice salary that was paid to you in the last pay period before 19 March 2020. Even if you cancel your salary sacrifice arrangement, your furloughed pay will still be based on your post-sacrifice pay and not your pre-sacrifice pay. You won’t, therefore, receive any more pay by taking this action.

You will stay auto enrolled
However, if you cancel your salary sacrifice arrangement, and you haven’t ceased membership of your workplace pension, your employer is still legally obliged to ensure your auto enrolment continues – so you will just pay your contributions in a different way.

This means if you’re furloughed and cancel your salary sacrifice arrangement, your take-home pay may be reduced further. This is because you may now have to pay contributions net of pay (after all deductions have been taken out).

Calculations of pension contributions under a salary sacrifice agreement are complex, so please speak to your HR/ payroll team if you need any more information.

A salary sacrifice arrangement is a contractual agreement between you and your employer where you agree to give up some of your salary (‘the sacrifice’) in return for a benefit from your employer, such as a pension contribution.

These schemes vary between different organisations so details of your agreement will be set out in the terms and conditions of your employment. Salary sacrifice agreements are described as ‘by agreement’– that is, decided between you and your employer.

Your original salary is known as the ‘pre-sacrifice salary’ and your reduced salary after sacrifice is your ‘post-sacrifice salary’.

If you have a salary sacrifice agreement and you’ve been furloughed under the Coronavirus Job Retention Scheme, your employer is still required to make pension contribution payments and follow their usual pension arrangements.

At no point can your employer ask you to temporarily suspend or stop pension contributions.

Yes. The Coronavirus Job Retention Scheme(CRJS) has supported furloughed employees going back to work part-time since 1 July 2020.

Your take-home pay remains the same (i.e. 80% of your wages, up to a cap of £2,500, depending on the level of non-working hours), as well as your National Insurance Contributions (NICS) and pension contributions), with the split of payments being in line with the CJRS.

Your employer will be responsible for paying your wages, NICs and minimum pension contributions in line with the hours you work. The government will pay the remaining wages and contributions. You don’t need to do anything.

Yes. Under the auto enrolment duties, your employer is still legally obliged to enrol all eligible employees into their workplace pension scheme every three years.

Many firms are now approaching their first re-enrolment anniversary, so your employer should let you know when this will happen. 

Employees who are currently being paid under the Coronavirus Job Retention Scheme (CJRS) will receive statutory redundancy pay based on their normal wages, rather than the reduced furlough rate. The government introduced this legislation on 31 July 2020.

The regulations aim to ensure all furloughed employees who are being made redundant receive their full entitlement. They aren’t intended to affect any enhanced redundancy terms in an employee’s individual employment contract.

They also cover other employment rights that rely on average weekly pay, including those relating to notice pay, unfair dismissal, and short-time working.

Yes. The government’s CJRS – also known as the furlough scheme – has been extended across the UK until 30 September 2021.

If you’re furloughed, you’ll receive up to 80% of your current salary for the hours you don’t work, up to a maximum of £2,500 per month, (depending on the level of non-working hours). Your employer will continue to pay National Insurance (NI) contributions and pension contributions.

Businesses can choose to bring furloughed employees back to work part-time or furlough them full-time.

Neither employers nor employees need to have previously used the CJRS in order to access the extended scheme.

Any employees who were made redundant after 23 September – when the Job Support Scheme (JSS) was announced – can be brought back on to the scheme.

The JSS, which was due to replace the CJRS on 1 November, has been postponed until the furlough scheme ends.

You can find out more about the changes to the scheme here.

You may have noticed a fall in the overall value of your savings during 2020. This was due to the economic impact of the COVID-19 pandemic, which made markets more prone to big shifts between gains and losses.

This is normal, and we expect markets will continue to behave in a similarly hard-to-predict way. Pensions are a long-term investment for most people and remaining invested in the markets still remains the best approach. Don’t forget, if you’re within 15 years of your planned retirement age we’ve already started to protect your pension by gradually moving it to lower-risk investments. So the people closest to retirement wouldn’t have been affected as much by the changes in values caused by COVID-19.

Since March 2020 the Diversified Growth Fund has recovered much of its value. However, we expect further changes in values in the coming months and years. This is normal for an investment fund.