FAQs for Members

The government has announced that all auto enrolment pension schemes, including ours, must waive their flat fee administration charges for individual members who would have pensions savings of £100 or less in their pot after deduction of the fee. This is in line with pension legislation and aims to help prevent small amounts of pension savings (small pots) being eroded by charges.

Our investment strategy for the Scheme carefully balances different types of investment risk to help your money grow and protect its value – an approach known as lifestyling.

Lifestyling is an investment approach that’s designed to:
• grow your pension savings over most of your working life, then
• protect the value of those built-up pension savings as you approach your planned retirement age.

We do this through our Journey Path to retirement.

Fifteen years before your planned retirement age, we start to gradually switch most of your savings from our Diversified Growth Fund (designed to grow your savings) to our Retirement Countdown Fund (designed to protect your savings from falls in value). The aim is to reduce the risk of your pension savings falling in value as you get closer to retirement.

We explain this in more detail on pages 7-9 of our Member Booklet. You can download a copy here.

You can find out more about our investment strategy in our Statement of Investment Principles.

We’ve been investing in green bonds – funding environmental and climate-positive projects like railways and wind farms – since 2017. We believe that responsible and sustainable investment is central to getting good investment returns over the long term.

As a result of our 2020 investment review, we’re committed to increasing our investment in companies that have stronger sustainability characteristics and lower carbon footprints, as well as achieving good standards on:

• environmental factors such as carbon emissions and water management
• social factors such as employee and local community relations, and
• governance factors such as board diversity and remuneration.

We’ve committed our investment portfolios to net zero greenhouse gas emissions by 2050, with a 50% emissions reduction target by 2030, based on 2019 levels. This informs our investment decisions.

You can find out more about this on our responsible and sustainable investment page.

Part of our approach to responsible investing is making investment decisions based on environmental, social and governance (ESG) factors, without impacting the growth of your pension savings. This means investing in companies that have stronger sustainability characteristics and lower carbon footprints. These companies also achieve good standards on:

• environmental factors such as carbon emissions and water management
• social factors such as employee and local community relations, and
• governance factors such as board diversity and remuneration.

They are invested in one of two investment funds, depending on where you are in your pension saving journey.

Our Diversified Growth Fund
During most of your working life, we invest your pension savings in our Diversified Growth Fund. This fund is designed to provide stable growth, above the rate of inflation, without too much volatility (ups and downs in value) over the long term.

Our Retirement Countdown Fund
Starting 15 years before your target retirement age – the age you’ve told us you want to retire at – we gradually switch your pension savings to the Retirement Countdown Fund. This fund aims to protect the value of your pension savings, reducing the risk of them falling in value when you’re due to turn them into retirement benefits.
We call this switch from growth to protection investments your ‘Journey Path’ to retirement.

Unless you tell us otherwise, we assume your planned retirement date is your State Pension age. Please keep us updated if your plans change. Remember, you can change your target retirement date in your online member account.

Additional information

• Our Member Booklet explains our Scheme and investment approach in more detail.
• Our Statement of Investment Principles (SIP) sets out details of our investment policy.

Starting 15 years before your target retirement age – the age you’ve told us you want to retire at – we gradually switch most of your pension savings to our Retirement Countdown Fund. This fund aims to protect the value of your pension savings, reducing the risk of them falling in value when you’re due to turn them into retirement benefits.

This is an investment approach known as lifestyling. It’s designed to:

• grow your pension savings over most of your working life, then

• protect the value of those built-up pension savings as you approach your planned retirement age.

We call this switch from growth to protection investments your ‘Journey Path’ to retirement.

Advantages
The advantage of the Journey Path is that it’s an automatic process designed to protect your pension savings from big gains and losses as you approach your planned retirement age. We move your savings gradually to protect against them all being moved when markets are low.

Disadvantages
Switching investments may not be appropriate if you want to take your benefits before or after your planned retirement age. This is because we may move your pension savings to low-risk funds when you could continue to let them grow.

Alternatively, your savings could experience short-term losses in the run-up to taking your benefits, because they were left in our Diversified Growth Fund. So, it’s important that you keep us updated if your planned retirement date changes.

We explain this in more detail on pages 7-9 of our Member Booklet. You can download a copy here.

Unless you tell us otherwise, we assume your planned retirement date is your State Pension age. Please keep us updated if your plans change.

It normally takes one or two weeks depending on when we receive pension contributions from you and your employer.

Investment takes place on a Wednesday each week, with all contributions received between the Tuesday of the week before and the Monday of that week being invested.

There’s a one-day reconciliation period after the contribution has been received that causes the contributions received on the Tuesday in the week before to miss investment on the Wednesday of the week in which the contribution was received.

We receive the contributions from you and your employer and pass the money to our custodian, BNY Mellon, which holds it in a ring-fenced account on behalf of the NOW: Pensions Trustee.

Your money is then invested in line with the investment manager’s instructions. Our investment manager is Cardano Risk Management Limited (CRML), a subsidiary of Cardano Holding Limited.

NOW: Pensions is authorised and regulated as a master trust by The Pensions Regulator (TPR). We’re one of approximately 38 master trusts approved and supervised on an ongoing basis by TPR to maintain the quality of master trust providers in the UK. This means increased protection for members and their pension savings.

We employ a specialist custodian which is responsible for guarding and protecting your money. It holds your pension savings, and those of all members, under a custody agreement (which is protected by the law) until you ask for your benefits to be paid.

The money is kept in a ring-fenced account which is separate from NOW: Pensions and the custodian’s own funds and company accounts. This means your benefits are protected if anything happens to NOW: Pensions Limited.

Our custodian, BNY Mellon, is one of the largest in the world. It looks after over US$30 trillion on behalf of pension schemes and other investors. It has strong credit ratings: for example, the credit rating agency Standard and Poor’s rates it AA- for long-term deposits.

We invest the contributions from you and your employer:
• to help them grow over time
• to protect their value as you get closer to retirement, and
• in ways that benefit the environment and our society.

We want you to get the best possible return for your hard-earned pension savings – so we have a well-researched ‘pension saving journey’ designed to give you good value for money and positive long-term outcomes. The NOW: Pensions Trustee takes responsibility for investing your savings with help from professional investment advisers.

We’ve also long believed that, as a pension provider with a strong focus on social responsibility, we should be investing for good, as well as growing your pension savings. We believe that getting positive investment outcomes, and investing for a better world, go together. We hope you welcome the thought that your pension investments can contribute to a better, more sustainable world.

If you want to know more about our investment approach and the funds we invest in, please see our Member Booklet or our Statement of Investment Principles.

The value of your pension savings is linked to the value of the fund’s investments. These values can go up or down over time, and these changes in value are a normal part of saving for a pension. As you get closer to retirement we gradually move your pension savings into investments that don’t change in value much.

This is designed to help protect the value of your savings before you turn them into retirement benefits – so ups and downs in investment markets are likely to have less effect on the value of your pension savings at that stage.

Yes. Even if you’re a deferred member who’s stopped contributing to the Scheme, the following charges still apply. 

• A monthly administration charge of £1.75 (£21 a year) which covers the cost of running the Scheme.
• An annual investment charge of 0.3% of the value of your savings. This covers the cost of investing your money and it doesn’t change.

Transaction costs, for buying and selling investments, also impact your savings. These costs are levied by others when investing your savings. These costs are factored into the returns on your savings.

You can see the combined effect of the annual investment charge, monthly administration charge and transaction costs over time in our costs and charges booklet.

These charges are the same for all members, whether you’re:

• an active member contributing to your pension regularly, or
• a deferred member – you’ve stopped contributing but still have pension savings in the Scheme.

We believe splitting the charges in this way spreads the costs fairly across all members. It also makes it easier to understand what you’ll pay for your pension every year.

Monthly administration charge
This is the charge we make for running the Scheme and it costs you £1.75 each month (£21 a year).

Charging limit
We won’t take any administration charges if this deduction would result in your pension savings account falling below £100. This will help prevent small amounts of pension savings being eroded by administration fees.

The annual investment charge of 0.3% will remain the same for all members. This is one of the lowest charges in the industry.

Annual investment charge
This is for investing the money in the Scheme and costs 0.3% of the value of your pension savings each year.

The amount you pay for your pension matters a lot over a lifetime of saving. Download our costs and charges booklet for examples of the effect of costs and charges on the value of your pension savings over time.

No. If you leave your employer or stop contributing to your pension, you can transfer your pension savings out to another pension provider. We won’t charge you to transfer your pension savings out.

However, it’s possible the pension provider you’re transferring to will make a charge. You should check this.

If you’re leaving a small amount of savings in the Scheme – only a few hundred pounds, for example – it may be sensible to transfer your savings out, because the charges will continue to apply. If you don’t move your money, the charges could mean that your pension savings get smaller over time, as the total charges each year could be higher than the investment returns on your pension savings.

Costs and charges explained

The amount you pay for your pension matters a lot over a lifetime of saving. To help you understand pension charges, we’ve provided examples of how pension savings can be affected by the compound effects of costs and charges in our costs and charges leaflet. You can download a copy here.

No. You can transfer savings from other pension providers into your pension savings with us free of charge, as long as the Scheme can accept the pension you’re transferring in. See more on our Transfers FAQs section.

Yes. These charges are the same for all members, whether you’re:

• an active member contributing to your pension regularly, or
• a deferred member – you’ve stopped contributing but still have pension savings in the Scheme.

We send you an annual benefit statement that explains the value of your pension savings with us, including the costs and charges that apply. 

Our charging structure is designed to be simple, transparent and fair. Our charges cover administration for your pension savings, management fees for investing your money and the cost of buying and selling investments

All members of the NOW: Pensions Trust (‘the Scheme) pay two charges.

• A monthly administration charge of £1.75 (£21 a year) which covers the cost of running the Scheme.
• An annual investment charge of 0.3% of the value of your savings. This covers the cost of investing your money and it doesn’t change.

Transaction costs, for buying and selling investments, also impact your savings. These costs are levied by others when investing your savings. These costs are factored into the returns on your savings.

You can see the combined effect of the annual investment charge, monthly administration charge and transaction costs over time in our costs and charges booklet.

These charges are the same for all members, whether you’re:

• an active member contributing to your pension regularly, or
• a deferred member – you’ve stopped contributing but still have pension savings in the Scheme

We believe splitting the charges in this way spreads the costs fairly across all members. It also makes it easier to understand what you’ll pay for your pension every year.

Monthly administration charge
This is the charge we make for running the Scheme and it costs you £1.75 each month (£21 a year).

Charging limit
We won’t take any administration charges if this deduction would result in your pension savings account falling below £100. This will help prevent small amounts of pension savings being eroded by administration fees.

The annual investment charge of 0.3% will remain the same for all members. This is one of the lowest charges in the industry.

Annual investment charge
This is for investing the money in the Scheme and costs 0.3% of the value of your pension savings each year.

Here’s how this works for different amounts of pension savings.

The amount you pay for your pension matters a lot over a lifetime of saving. Download our costs and charges booklet for more examples of the effect of costs and charges on the value of your pension savings over time.

Yes. We’re formally authorised and regulated by The Pensions Regulator, having successfully gone through the master trust authorisation process in September 2019.

We’re one of approximately 38 master trusts approved and supervised on an ongoing basis by The Pensions Regulator to maintain the quality of master trust providers in the UK. This means increased protection for members and their pension savings. You can see a list of approved master trusts on their website.

Your fund value is updated each week, usually on a Friday or Saturday. Simply go to www.nowgatewayx.com and enter your NOW: Pensions contract ID or your email address (if you registered one), plus your NOW: Pensions password.

Your fund value summary shows the current value of your pension savings. This is the total amount you and your employer have paid in, plus any change in the value of your investments, less any charges. It also shows any additional voluntary contributions you’ve paid and any other pensions you’ve transferred in.

Yes. You can check the latest unit prices for our Diversified Growth Fund and our Retirement Countdown Fund here. You can also check historical fund fact sheets. See more on our Investment strategy page.

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.