What it costs
Saving for your retirement might cost less than you think, especially if you contribute through salary exchange and make the most of Lloyd's Register's Company contributions. Use the Pensions Calculator to see what your retirement savings might look like in the future.
What is salary exchange?
Your contributions into the DC Section are based on a percentage of your pensionable salary and they're taken directly from your monthly pay unless you choose salary exchange. Your pensionable salary is your basic annual salary from Lloyd's Register, adding back in any salary you've given up for childcare or cycle-to-work schemes.
You can make your contributions by salary exchange instead. This means that you agree to exchange part of your salary in turn for contributions to your pension account. This means that both you and Lloyd's Register make National Insurance (NI) savings, so you should see an increase in your overall pay packet.
How salary exchange works:
- You stop paying pension contributions directly from your pay each month
- Lloyd's Register pays these contributions on your behalf along with its own contributions
- Your salary is reduced by the amount you would have contributed
- This saves you money because your NI contribution is calculated on a lower salary
- This means you will end up with an increase in your take-home pay
Salary exchange doesn't work for everyone — for example, if you're over State Pension age, earning close to the Lower Earnings Limit for National Insurance, earning close to the National Minimum Wage or working outside the UK. We'll let you know if this applies to you.
If you don't want to contribute through salary exchange, or if it's not beneficial to you, you still benefit from tax relief because you don't pay tax on any contributions you make in any one year up to the Annual Allowance.
Your contributions
You can pay between 3% and 8% of your pensionable salary into your DC Section account. Lloyd's Register will also contribute up to a maximum of 15%.
This table shows you the DC Section contribution breakdown, and also the savings you could make by paying in through salary exchange.
| Selected contribution rate | Salary exchange savings | Actual cost | Employer contributions | Total Contributions | |
|---|---|---|---|---|---|
| Ordinary Contributions | 3% | 0.25% | 2.75% | 10% | 13% |
| 4% | 0.5% | 3.50% | 11% | 15% | |
| 5% | 0.5% | 4.50% | 12% | 17% | |
| 6% | 0.75% | 5.25% | 13% | 19% | |
| 7% | 0.75% | 6.25% | 14% | 21% | |
| 8% | 1% | 7% | 15% | 23% |
Your annual benefit statement contains a breakdown of your contributions, the value of your DC Section account, and a projection of what it might be worth at your Normal or Selected Retirement Age. It's worth considering increasing your contributions to stay on track for your retirement income goal.
You can increase your contribution rate to make the most of Lloyd's Register's matching by logging in to Lifelens from Connect on your work computer.
Watch this handy video to find out how you can change your contributions.
Additional employee contributions
You can really boost your retirement income by paying additional employee contributions into your pension each month. Use the pension calculator to see what increasing your contributions might look like for your future retirement savings.
You can set up Additional Employee Contributions via Lifelens or by contacting Group Pensions. When you make contributions above 8%, Lloyd's Register's contribution remains at 15%.
Contribution limits
There are certain limits on how much money you can pay into your pension and qualifying for tax relief — in other words, you don't pay tax on your contributions until you exceed these limits.
Annual Allowance
The Annual Allowance (AA) is the amount of money you can pay into your pension(s) every year and qualify for tax relief. The current AA is £60,000 for the 2024/2025 tax year.
If you are a high earner you may be affected by the Tapered AA. If your earnings (including employer pension contributions) are over £260,000, the Tapered AA reduces your annual allowance by £1 for every additional £2 of earnings down to a minimum of £10,000. The new flexibilities are only available to LRSFA members once you leave the Scheme. But you may have other pensions where this applies. If you think you may be affected by the TAA, you may want to take financial advice. You can find an adviser near you on Unbiased.
The Lifetime Allowance
The Lifetime Allowance (LTA) was the amount of money you could pay into all your pensions during your working life that qualified for tax relief.
The LTA tax charge was removed from the LTA from April 2023, and the LTA was removed completely from April 2024. Please keep in mind that, for most people, the amount you can take as your tax-free entitlement will stay at 25% of the previous lifetime allowance limit of £1,073,100.
From April 2024, the government introduced three new limits.
The Lump Sum Allowance (LSA)
The LSA is the total tax-free lump sum limit you can receive from all your pensions, unless you have a valid protection certificate that allows you to take a higher tax-free amount or a transitional certificate that takes into account benefits that you have already taken. From April 2024, the LSA limit is £268,275 (that is 25% of £1,073,100). Any amount in excess of this limit will be taxed at your marginal rate.
The Lump Sum Death Benefit Allowance (LSDBA)
This is the total tax-free lump sum amount that can be paid to beneficiaries if someone dies before age 75. The LSDBA limit is £1,073,100. Any amount in excess of this limit as taxed at your marginal rate.
The Overseas Transfer Allowance
The Overseas Transfer Allowance is the total value of pensions that you can transfer to a Qualifying Recognised Overseas Pension Scheme (QROPS). The limit is £1,073,100 and if you exceed this limit, the amount will be subject to a 25% tax charge.
Visit the government website for further information.