Your most frequently asked questions answered in a nutshell.

PG IMI Roadshow FAQ Green v1

Posted by

Pension Geeks

Published on

3 July 2020

Need an answer to your pension question quickly, this is the place to look. If there's anything else you need further help with, don’t hesitate to book a 1-to-1 chat with one of our friendly pension geeks.

What is a pension?

Put simply, this is a pot of money which you and IMI can pay into that aims to provide you with an income for later life or when you decide to retire (You may also hear this referred to as a pension or workplace pension – it’s all the same thing).

One day, presumably, you’ll want to stop work or work less, and you will no longer have your salary. You will still have bills to pay and you’ll want to have a bit of a life - so you need to think about what you are going to live on – this is where a pension comes in!

Workplace Pensions are usually two types, called DC pensions or DB pensions. Defined contribution (DC) is the more common, and this is your MMT savings and the IMI Retirement Savings Plan. This is where your pension pot is put into various types of investment, such as stocks and shares. Most company pension schemes are now defined contribution.

Defined benefit schemes (sometimes called a final salary pension scheme) is a scheme that promises to pay out an income based on your service and how much you earn when you retire - this is the IMI 2014 Deferred Fund.

Many defined benefit schemes have closed over recent years.

Do I really need a pension?

Well, presumably you don’t want to work forever – and sorry to burst your bubble, but that lottery win is not guaranteed, so when you’re older and no longer working, or perhaps working less, you’ll still need some money to pay your bills and to have enough money for fun stuff.

You don’t have to have a pension. You may have other savings or investments that you plan to live on, but the Government decided in 2012 that by law you have to be enrolled into a workplace pension scheme automatically, if you are at least 22 years old, under state pension age and earn a minimum of £10,000 a year.

You can opt-out of the company pension scheme if you want to, but as IMI sets this all up for you and they put some money in, plus you get tax relief from the government - it’s money you wouldn’t otherwise receive, so it makes sense to stay in.

There are other savings products available, such as ISA’s, other savings accounts, investments, property, etc but none have the same benefits as a pension.

How does the State Pension work?

Everyone will receive a State Pension, and this is in addition to your MMT Savings and any other pensions, or savings you may have.

The State Pension is paid to you by the Government, and the amount you’ll get depends on how many qualifying national insurance contributions or credits you’ve made.

You get these automatically either from working or claiming benefits. The full new State Pension amount is currently £185.15 a week and to get the full amount you’ll need a total of 35 qualifying years of national insurance contributions or credits, but you will get something if you have a minimum of 10 years national insurance contributions or credits.

You can check your national insurance record and how much State Pension you’re likely to get by doing a State Pension Forecast:


When you’ll get your State Pension depends on when you were born, so it’s worth checking when you’re likely to get yours on the Government’s website:


What is tax relief?

The Government rewards people for investing into their pension, so when you pay into your Retirement Savings, some of the money that you would have paid in tax on your earnings goes into your pension pot rather than to the government – this is called tax relief. The amount of pension tax relief you get on your pension contributions depends on the top rate of income tax you pay:

Basic rate = 20%

Higher rate = 40%

Additional rate = 45%

As an example, if you are a basic-rate taxpayer and were to contribute £100 from your salary into your pension, it would actually only cost you £80. The government adds an extra £20 on top – what it would have taken in tax from £100 of your salary.

What if I can’t keep up my regular pension contributions?

Don't worry. You can reduce your contribution to a level that's more affordable, or you can stop making contributions altogether then restart again when you're ready.

There's no charge for reducing or stopping your contributions. However, the amount you get back in the future will be reduced if you choose either of these options.

What is a Master Trust?

Put simply, a Master Trust is an approved pension arrangement that allows groups of employers to combine their funds in a Trust to provide pension benefits for their employees.

The advantage of this group collaboration is increased buying power and lower running costs for the pension schemes.

The pension benefits are administered by a Master Trust provider, who in turn, is accountable to an independent Trustee Board.

A Master Trust offers more strength in numbers, flexibility through combined buying power, lower costs and good governance through the Trustee Board.

All master trusts have to be authorised by the Pensions Regulator, together with the Financial Conduct Authority (FCA) which regulates the financial promotion of the master trust.

When should I start saving into the MMT?

As soon as you can - even if it’s just with a small amount. The thing to remember about a pension, is that the money you pay in is invested and the longer you can leave your savings invested, the more time it will have to grow.

If you start saving in your 20s, it’s so much easier to build up a good pension pot by the time you retire. If you start later, say in your 30s or 40s, you'd need to save much more to catch-up, and provide you with the same level of income in retirement.

How much should I contribute to my pension each month?

There is a legal requirement as to the total contributions you need to pay into your pension. The current minimum contribution is 8%. IMI only has to pay 3% of this, so you must make up the other 5%. At IMI, the company will match your contribution though, and they will pay up to 7%, so if you pay 7%, they’ll pay 7% too. That’s 14% you could have going into your pot – this is a really good perk, so take full advantage of it.

If you can afford to pay in more than the minimum, then you should try to. When it comes to retirement, saving as much as possible, as early as possible, is the best way to build up a substantial pot of money for your future.

A really good rule of thumb to work towards is saving half your age as a percentage of your earnings. So, if you start saving at age 22, you should be considering saving 11% of your salary into your pension and maintaining this level. If you start later at 32, you should try to aim towards saving 16%.

What happens to my pension if I go on maternity leave?

While on maternity leave, you can continue, reduce or stop your contributions – it’s up to you. When you return to work, you can easily increase or start them back up again. Just speak to your HR department.

Remember that reducing or stopping your contributions will reduce the amount you get back in the future.

What happens to my pension if I leave my job?

If you leave your job or move jobs, you’ll stop paying into your MMT and any employer contribution from IMI will also stop. Your pension still belongs to you and the money will remain invested. You’ll be able to access the money when you are aged 55.

Your new place of work will have a different pension scheme, and this may be with a different provider to your previous employer. Assuming you qualify, you will be auto-enrolled into another workplace pension scheme if you get a new job.

It may be more manageable to combine all of your different pension pots into one place. See below:

If I have lots of different pension pots, can I move my money into one pot?

It is possible to combine all of your different pension pots to make them more manageable. First of all, the most important thing to understand is whether or not your pension is a defined benefit scheme or a defined contribution scheme.

If it’s a defined contribution scheme (which most are nowadays) you need to check with the pension provider that you can move them and make sure that you won’t lose out on any benefits, guarantees or special features by doing so. You’ll also want to compare the charges. Each different pot you have is charged a management fee by the provider and schemes are allowed to charge different amounts.

If you’re unsure of whether combining your different pensions is right for you, it’s worth speaking to a financial adviser.

If your pension is a final salary scheme (also known as a DB scheme) generally, it’s not a good idea to transfer from a final salary scheme, as you would be giving up a fixed income for a less certain one and it’s possible you’ll be worse off. It is also usually a legal requirement to seek independent advice before transferring a final salary pension - as this is a big decision and cannot be reversed.

When can I retire?

You can retire when you want to - there’s no law to say you have to work until age 65, but you need to make sure you’ll have enough money to live-on.

The MMT's normal retirement age (NRA) is 65 but you can take your retirement savings between age 55-75. Remember that the money may need to last the whole of your retirement, so plan carefully.

The age in which you can expect the State Pension is gradually increasing. For men and women, this is currently 66. The State Pension age is scheduled to rise to 67 between 2026 and 2028.

What should I do if I’ve lost track of any pensions?

You should receive a yearly update from any of your old pension schemes, but if for example, you’ve moved address, then the provider won’t have the correct information to send this to you.

If you’ve lost track of any old pensions the first thing to do is check any old paperwork you have to find out who the pension provider is. Email or call the company providing the pension and ask them for more information about your savings and explain that you would like to move it.

If it’s a workplace pension you’re trying to track down, you could also try contacting the company you used to work for. If you can’t find any of these details – The Government offers a free Pension Tracing Service to help you track down any missing pension pots. You can visit their website for further help. Make sure you use the Government one, as this is free. There are others that offer this service, but some charge for this.


Is there a maximum amount I can pay into the pension?

The short answer is as much as you want - there’s no cap on the amount of money you can save into your pension each year, however there is a limit on how much you can save tax-free.

The standard rule is that you’ll get tax relief on pension contributions of up to 100% of your earnings or a £40,000 annual allowance, whichever is lower.

Contributions that exceed the £40,000 annual allowance (this includes the total sum of your contributions, IMI contributions and government tax relief received) are subject to an Annual Allowance charge in line with income tax. This can be offset, however, by any unused allowance from the three previous years - as long as you were a member of a pension scheme during those years.

This is where it gets a little more complicated - if you’re drawing an income from your pension, you need to be aware of the Money Purchase Annual Allowanc (MPAA). This restricts how much money you can pay into your pension tax-free, once you’ve started drawing an income from it, so it reduces your annual allowance. In 2021/22 the money purchase annual allowance is set at £4,000. It does only apply in certain circumstances. The best place to find more information on this is, The Money Advice Service:


In addition to the annual pension allowance, there is also a Lifetime Pension Allowance. Most people won’t be affected by this, but it means that there’s a limit on the value of pension benefits you can receive in a lifetime without having to pay excess tax. For 2021/22, the lifetime allowance is currently capped at £1,073,100, but this is set to increase in the future.

If you exceed the lifetime pension allowance, you’ll be subject to an immediate tax whenever you take the excess benefits from your pension. 25% will be charged if paid as a pension or 55% if paid as a lump sum, plus income tax at your standard rate.

When can I take my pension money?

The earliest you can access your retirement savings from the MMT is age 55 and you don’t have to retire or stop working to take your money.

If you are in ill health, there may be some circumstance where you could access your money earlier. Check with the HR department.

How can I take my Retirement savings?

When you’re ready to take your retirement savings, you have a number of options. The main options are:

 Use your account to buy an annuity, which will provide you with a guaranteed

income for life.

 Take your whole account as cash over one or two years.

 Take a flexible income – also known as drawdown.

You can also take a combination of these options if you want to, and whichever option you choose, the first 25% you take is tax free.

It is recommended you seek independent financial advice before making any big financial decisions.

There’s also a free and impartial Government service available, called Pension Wise.

They have been specifically set-up to help you understand the different ways you can take your money.


What happens to my pension when I die?

If you die while you are working for IMI, your dependants will receive a lump sum of five times your basic pay.

The value of your account will also be paid at the discretion of the Trustee. You need to ensure you have completed an up to date Expression of Wish Form, in order to ensure your money will go to who you want it to go to. You can choose as many people as you like, but you need to make sure you keep this form up to date whenever your circumstances change.

If I carry on working, can I still take my pension savings?

In short, yes you can. If you choose to carry on working, or work less, your earnings will not reduce the pension you receive. However, the combination of earnings and pension you take will increase your taxable income.

Once you reach State Pension Age, you no longer have to pay National Insurance Contributions (NICs), so if you carry on working you should check that National Insurance contributions are no longer deducted from your pay.

Is my pension safe?

Pensions are protected in various ways to make sure you don’t lose out.

Your pension funds are managed by the pension provider (not your employer), so if the worst did happen and your employer goes bust, your pension would be fine. If your pension provider goes bust and cannot pay your pension, the Financial Services Compensation Scheme (FSCS) would pay 100% of the claim.

No savings, including pensions are entirely risk free. The value of your pension can go down as well as up, but there are stringent controls in place to minimise risks to pensions.