At the moment you can start taking your pensions savings once you reach 55.  This will go up to 57 from 6 April 2028.  

You have a now:pensions account. It’s like a savings account. You and your workplace pay money in to your account. You can see how much you pay and how much your workplace pays by logging in to now:u.

You don’t normally pay tax on the money you put into your pension savings, so the whole pre-tax amount goes in. This is called tax relief. Even if you don’t earn enough to pay income tax, you don’t miss out. You’ll get a tax top-up from the government (although this is paid in to your bank account, not your pension savings). 

The money’s invested by experts to help it grow. When you retire, you can use the money you’ve built up to give yourself a retirement income. Your pension savings always belong to you, even if you leave your workplace in future. Go to Manage your pension to find out more.

You’ve been auto enrolled into a pension. Auto enrolment means that, as long as you qualify, your workplace must put you into a pension and pay money into it for you. Usually, you also pay money in to your pension savings.

Your workplace has chosen now:pensions as your auto enrolment provider. So, you’re building up pension savings in a now:pensions account. You can see how much you pay and how much your workplace pays by logging in to our now:u app. Or, you can ask your workplace.

We invest your pension savings to help them grow over the long term. The value of your pension savings isn’t guaranteed and can go down as well as up.

You can use now:u to manage your pension, see how your savings are building up and how much you could have when you retire.

Tax relief

If you’re a taxpayer, you get tax relief on the money you pay in. This means some of the tax you would have paid goes in to your pension savings instead.

If you count as self-employed, you’ll need to claim your tax relief yourself when you do your self-assessment tax return.

If you don’t earn enough to pay income tax, you don’t miss out. The government has introduced a tax top-up for people who are paying in to a pension, but who don’t earn enough to pay income tax.  

If you qualify, HM Revenue  & Customs (HMRC) will contact you, and this Is likely to be In 2026. The first payment will be backdated to 2024-2025.

Find out more about the tax top-up scheme. 

Stopping paying in

You can stop paying in to your now:pensions account at any time. But if you do, your workplace stops paying in too. 

The law says you have a right to stop paying in and get back any money you’ve paid in so far. But you must tell us you want to stop paying in by the end date in your enrolment email. You should have received this email after you started at your workplace. 

As long as you ask to stop paying in to your now:pensions account by the end date in your enrolment email, you can get back any money you’ve paid in so far. Your workplace will refund the money taken from your pay (but not the money your workplace paid). Then, you’ll be treated as if you’d never been enrolled into now:pensions. 

If you stop paying in to your now:pensions account after the end date in your enrolment email, the law says you can’t get a refund of the money you’ve paid in. The money’s still yours, though. It will stay in your account – together with the money your workplace has paid in – until you start taking it or transfer it out to another pension provider. 

Yes. You don’t pay income tax on the money you pay into your pension. The whole pre-tax amount goes into your pension savings. 

now:pensions is a net pay arrangement. This means your pension payments come out of your earnings before taking off income tax. 

Here’s how this works 

• Your workplace takes your pension payments out of your salary before the tax comes off. 

• You only pay tax on what’s left. 

• So if you pay in £100, the full £100 goes into your pension savings. 

• If you take the £100 as salary rather than paying it into your pension savings, you only get £80, because your workplace takes £20 out as income tax. 

If you’re a higher-rate taxpayer, you’ll get tax relief on your pension payments at your highest rate. 

If you don’t pay income tax, you don’t automatically get tax relief, but you’ll get a tax top-up from HM Revenue & Customs.

If you count as self-employed, you’ll need to claim your tax relief yourself when you do your self-assessment tax return.

Annual allowance

You can pay up to the whole of your salary – 100% – into your pension savings and still get tax relief, as long as the amount you and your workplace pay in doesn’t go over 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 annual allowance is £60,000 for the tax year 2025 to 2026. If you go over this you’ll have to pay tax on the amount over the allowance.

If you use all your annual allowance in a tax year, carry forward allows you to use any unused annual allowance from the last three tax years. This means you could save more into your pension in the current tax year and still qualify for tax relief.

You can’t carry forward any annual allowance if you’ve triggered the money purchase annual allowance.

Money purchase annual 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.

The tax top-up scheme means you can get tax relief on money you pay in to your pension savings, even if you don’t earn enough to pay income tax.

How tax top-up works

now:pensions is a net pay arrangement. This means your pension contributions come out of your earnings before income tax is taken off. If you’re a taxpayer, you get automatic tax relief at your highest rate for that tax year. But if you don’t pay income tax, you don’t get tax relief.

Until January 2025 now:pensions had a tax top-up scheme to make sure members who didn’t earn enough to pay income tax didn’t miss out. You could apply to us for a top-up. If you qualified, we made top-up payments directly in to your pension savings.

But we were the only net pay pension scheme to do this.

Our tax top-up campaign success

For a number of years we campaigned, in partnership with the Net Pay Action Group, for the government to make top-up payments to non-taxpaying members of net pay schemes. We’re delighted this has been successful.

The government tax top-up

The government will now give you a tax top-up if you’re paying in to a workplace net pay pension scheme, but don’t earn enough to pay income tax. This usually means you earn less than the personal income tax allowance, currently £12,570 a year.

HM Revenue and Customs (HMRC) will contact you if you qualify, and pay the money directly to you (not into your pension savings). These payments are expected to begin in 2026 for the 2024/25 tax year.

Salary sacrifice is a tax-efficient way to arrange contributions to your workplace pension. It enables you to pay lower National Insurance contributions. Your workplace also saves on National Insurance.

You agree to reduce your salary by the same amount you pay in to your pension savings. Your workplace pays this money in for you, together with their own payments. This means:

• you pay less income tax, and
• you and your workplace both save on National Insurance contributions.

Not all workplaces offer salary sacrifice but if your workplace does, you might want to consider it (if you have the choice). You might also see it called ‘salary exchange’. 

How does salary sacrifice work?  

• You agree with your workplace that you’ll give up (sacrifice) an amount of your salary equal to the amount you pay into your pension savings.  

• Your workplace pays this amount into your pension savings for you. Then they add their own payment.  

• So the same amount goes into your pension savings as if you were paying it.  

• But, because your salary’s lower, you pay less tax and National Insurance. Your workplace also pays less National Insurance. 

• So your take-home pay can be a little higher.  

• Some workplaces pay their National Insurance savings into the pension, helping to build up your pension savings.  

If your workplace offers salary sacrifice, they’ll be able to explain more about how it works.

This depends on what definition of pensionable earnings your workplace uses – whether it’s qualifying earnings, basic earnings or total earnings. Most workplaces use qualifying earnings when calculating and paying pension contributions.

Qualifying earnings are all your earnings between a lower and upper limit. In 2025 to 2026 the lower limit is £6,240 and the upper limit is £50,270. The government will review these limits every year. Qualifying earnings include salary, wages, commission, bonuses, overtime, statutory sick pay and statutory parental leave pay (maternity, paternity and adoption pay).

Basic earnings include your basic pay and any statutory sick pay, statutory maternity pay, statutory paternity pay and statutory adoption pay. Workplaces can exclude things like bonuses, overtime and commission.

Total earnings are all your earnings including wages, commission, overtime, bonuses, performance-related pay and any other earnings.

Yes. The more you save for your retirement, the more income you could have when you take your retirement benefits.

How to increase the amount you pay in

Log in to now:u and go to Change your payments in > Pay in more. 

Choose an extra amount to pay each time you get paid. This must be a percentage of your salary as a whole number – for example, 2%. 

If you want to reduce your payments in, reduce or remove the extra amount you pay. 

Choose Confirm. Your workplace can tell you when the changed payments will start going in to your now:pensions account.  

Remember the tax relief

If you’re a taxpayer, you don’t pay tax on all or a lot of the money that goes into your pension savings. Instead, the tax you would have paid goes into your pension savings. This is called tax relief.  

If you wanted to, you could pay up to the whole of your salary into your pension in a tax year (6th April to 5th April) and you’d still get tax relief, as long as the total going into your pension savings, from you and your workplace does not exceed the annual allowance. This applies to all the pension schemes you’re actively saving into, including now:pensions and any personal pensions you have.

If you’re self-employed, you can claim tax relief via your annual self-assessment tax return.

The annual allowance is currently £60,000 a year.

If you exceed your annual allowance limit, you would usually have to pay tax on the excess. However, you may be able to carry forward any unused annual allowance from the previous 3 tax years, which could reduce the tax charge.

The annual allowance could reduce to £10,000 a year if you start taking your money out of now:pensions but also carry on paying in to your pension savings. This reduced annual allowance is called the money purchase annual allowance.

Normally, this is 5% of your auto enrolment qualifying earnings.

The minimum legal requirement for auto enrolment pensions is 8% of qualifying earnings. Workplaces must pay at least 3% of this, so you pay the remaining 5%. If your workplace pays more than 3%, you pay less. For example, if your workplace pays 4% of qualifying earnings, you pay 4%.

You can see how much you and your workplace pay by logging in to now:u and going to Payments in.

What are qualifying earnings?

Qualifying earnings are all earnings between a lower and upper limit set by the government and reviewed each year. They include salary, wages, commission, bonuses, overtime, statutory sick pay and statutory parental leave pay (maternity, paternity and adoption pay).

Other definitions of pensionable earnings

Some workplaces use a different definition of pensionable earnings, such as basic earnings or total earnings.

Basic earnings include your basic pay and any statutory sick pay, statutory maternity pay, statutory paternity pay and statutory adoption pay. Workplaces can exclude things like bonuses, overtime and commission.

If your workplace uses basic earnings, the minimum legal requirement is 9%. Your employer must pay at least 4% of this, so you pay at least 5%.

Total earnings are all your earnings including wages, commission, overtime, bonuses, performance-related pay and any other earnings.

If your workplace uses total earnings, the minimum legal requirement is 7%. Your workplace must pay at least 3% of this, so you pay at least 4%.

As long as you carry on paying in to your now:pensions savings, your workplace should also carry on paying in. They should work out their payments using the amount of your pensionable earnings before you started your paid parental leave.

But your own payments in to your now:pensions savings will be based on your actual earnings during your paid parental leave. For example, if you’re getting statutory maternity or paternity pay, this is what your payments will be based on.

If you decide to take unpaid leave after your paid parental leave, you don’t have to carry on paying in to your pension savings. Your workplace can also stop paying in, unless your employment contract says your workplace must pay in to your pension savings while you’re on unpaid leave.

When you return to work, you can pay extra money in to your pension savings to make up for the time you were on unpaid leave, if you want to.

Visit MoneyHelper’s maternity and paternity leave page to learn more.

You need to watch out for the money purchase annual allowance if you want to start taking money out of your pension savings while you’re still paying in to a pension. It reduces the combined amount you and your workplace can pay into your pension, and still get tax relief, to £10,000 a year.

This won’t stop you paying more than £10,000 into your pension savings, but you won’t get tax relief on any amount over £10,000 that you and your workplace pay into your pension savings in a tax year.

You can’t carry forward unused money purchase annual allowance.

The money purchase annual allowance

You could trigger the money purchase annual allowance by doing any of the following things.

1. Taking some or all your pension savings as cash (unless your pension savings are worth £10,000 or less – see below).
2. Buying the kind of guaranteed income (annuity) that can go down as well as up.
3. Moving your pension savings into a drawdown arrangement and starting to take income from it.

This isn’t a complete list. There may be other, less common, ways to trigger the money purchase annual allowance.

But, the three following things don’t usually trigger the money purchase annual allowance.

1. Taking all your pension savings as cash if they’re worth £10,000 or less.
2. Buying the kind of guaranteed income (annuity) that increases or stays at the same level.
3. Putting your pension savings into a drawdown arrangement to take tax-free cash, but not taking any income.

Again, this isn’t a complete list and there could be other ways to trigger the money purchase annual allowance.

If you’ve done something that could trigger the money purchase annual allowance

Your pension provider must tell you. They’ll send you a document called a flexible access statement within 31 days, or 91 days if you have an overseas pension.

You’ll need to tell all the pensions you pay into, now and in the future, if you’ve done any of the things we’ve listed above that could trigger the money purchase annual allowance. You must do this within 91 days of getting a flexible access statement or joining a new defined contribution scheme. To tell us at now:pensions, use our webchat.

The lump sum allowance is the maximum amount you can usually receive tax-free from all your pensions when you retire.

This allowance is £268,275 for the tax year 2026 to 2027. If the amount of cash you want to take from all your pensions means your tax-free cash will be higher than this, you’ll have to pay tax on the amount over the allowance.

There’s also the lump sum and death benefit allowance. This is the maximum amount that can be paid out tax-free from all your pensions when you die or suffer from serious ill health. For most people, this allowance is £1,073,100 for the tax year 2026 to 2027.

When you retire, most tax-free payments use up some of your lump sum allowance and your lump sum and death benefit allowance, but there are a few that don’t. Your pension scheme will tell you when a tax-free payment uses up any of your allowances.

You might have a higher lump sum allowance or lump sum and death benefit allowance if you’ve ever taken out any type of protection. Check if you’ve got any protected allowances on your pension savings.

These are the earnings your pension contributions are usually based on if you are auto enrolled into a pension scheme.

Qualifying earnings are all your earnings between a lower and upper limit. In 2026 to 2027 the lower limit is £6,240 and the upper limit is £50,270. The government will review these limits every year.

Qualifying earnings must include:

• salary
• wages
• commission
• bonuses
• overtime
• statutory sick pay
• statutory parental leave pay (maternity, paternity and adoption pay).

For example: if you earn £25,000 a year, your qualifying earnings are £25,000-£6,240 = £18,760.

Some workplaces use a different way to calculate pension payments. Look at What parts of your salary count towards payments in to your pension? for more about this.

Not while they’re building up. When you start to take your money out of now:pensions, you can usually have up to a quarter (25%) of it as tax-free cash, up to a maximum of £268,275. The rest is taxed like any other income. But you don’t pay National Insurance contributions on it.  

Yes. We’re formally authorised and regulated by The Pensions Regulator (TPR). We went through the master trust authorisation process in September 2019. This means better protection for our members and their pension savings.

We’re one of around 33 master trusts TPR has approved and supervises on an ongoing basis. This is to maintain the quality of master trust providers in the UK. The TPR website has a list of authorised master trusts.

You can get free and impartial guidance from Pension Wise, a service from government-backed MoneyHelper. It’s designed to help you understand the choices you have for taking your pension savings as retirement income. 

Pension Wise can explain: 

• how each retirement income option works 

• what tax you could pay 

• how to look out for scams.  

If you’re over 50, you can book a free guidance appointment. This can either be a call with a pensions expert, or a self-guided appointment online. Calls last about an hour. The self-guided appointment is expected to last about 30 minutes but you can save it at any time and come back to it later.

To book an appointment with a pensions expert, call 0800 138 3944 or use the webchat on the Pension Wise website.

To start a self-guided online appointment, go to the Pension Wise website.

If you’re not yet 50, you can still talk to a pensions expert by calling 0800 011 3797 or using the webchat on the Pension Wise website.

This information is general. It isn’t financial or professional advice, and it doesn’t take your specific circumstances into account. We recommend you take regulated financial advice before making any decisions that could affect your pension. We don’t accept liability for any loss or damage as a result of you using, or relying on, this information.