Questions and Answers

I have a question about:

Pensions in general

Pensions in general

  • What is a pension?

    What is a pension?

    A pension is a long-term savings plan, that aims to build up a sum of money for your retirement that you can use to live on when you’re no longer working. In a workplace pension, both you and your employer pay into the plan.

  • What are the different types of pension?

    What are the different types of pension?

    There are many different types of pension schemes. Workplace pension schemes are set up by employers, to help their employees save for retirement. Both you and you employer pay into this type of pension. You can also join a personal pension, where you pay into the pension but your employer doesn’t. Within workplace pensions, you can get defined benefit schemes and defined contribution schemes.

    The Boots Pension Scheme is a defined benefit scheme, while the AHBRSP and AE Scheme are defined contribution schemes.  

  • What is the difference between defined benefit and defined contribution pension schemes?

    What is the difference between defined benefit and defined contribution pension schemes?

    A defined benefit pension scheme is one where the amount you get at retirement is worked out using a formula, based on how many years you paid into the scheme and your salary.

    In a defined contribution pension scheme, you build up a pot of money that you can take at retirement. Unlike a defined benefit scheme, which promises a specific income, the amount of money you get from a defined contribution scheme is unknown, and depends on how much you paid in and the fund’s investment performance.  

  • How much should I be saving?

    How much should I be saving?

    That depends on a lot of different things, like how much you can afford to save, what other income you might have when you retire, and what sort of life you think you’ll want to have when you retire. If you like the idea of two cruises a year, you will obviously need to save more! 

  • What are the rates and allowances for this tax year?

    What are the rates and allowances for this tax year?

    Tax can be complicated, so L&G have created a useful guide to help you understand the tax rates and allowances that apply in the current tax year. Click here to view the document. 

  • Why should I get a pension?

    Why should I get a pension?

    Everyone needs money when they stop working, to pay basic living costs like housing, heating and food. Although you may get a State pension, it is only designed to cover very basic living costs, so if you want a more comfortable retirement you should make plans to top up your retirement income. A pension is a tax-efficient way of saving for the future, plus you have the added benefit that in a workplace pension your employer will pay money into your pension, too. 

  • I’m not British. What would happen to my pension if I went back to my country?

    I’m not British. What would happen to my pension if I went back to my country?

    If you leave the UK, you can usually choose to move the money you’ve saved over to a scheme in your own country, or leave it where it is until you retire. Different countries have different rules about pensions, and these may affect how you can use your benefits, but the money is always yours and you won’t lose it if you leave the UK. 

  • Will I get a State Pension?

    Will I get a State Pension?

    The amount of State Pension you get will depend on how many years of qualifying National Insurance (NI) contributions you have. The State Pension system changed from April 2016, and in order to receive anything at all under the new system you will have to have at least 10 years of NI contributions. 

  • Why should I join my workplace pension?

    Why should I join my workplace pension?

    There are a lot of good reasons to join your workplace pension. Firstly, your employer helps you save for retirement, by paying money into your pension (on top of the money you pay in yourself). If you didn’t join your workplace pension, you would not get this extra contribution.

    Another reason for joining is that the Government wants to help people save for the future, so you don’t pay tax on your pension contribution, which means it costs less than you think. If you are a basic rate taxpayer, every £1 you pay into your pension actually only costs you 80p.

    Finally, joining a workplace pension couldn’t be easier – your employer sets it all for you, so you don’t have to think about setting up direct debits or any of the other hassles you might have if you set up a personal pension.  

Joining a pension

  • Do I have to join a pension scheme?

    Do I have to join a pension scheme?

    No, but the Group’s UK businesses now have a legal obligation to automatically enrol eligible employees into a workplace pension. Employees who have been enrolled can leave (opt out) of the scheme if they wish to, but only once they have been enrolled, not in advance. 

  • When can I join the pension scheme?

    When can I join the pension scheme?

    If you are a new employee, you will be eligible to join the AHBRSP or be automatically enrolled after your third pay period (or 13 weeks if paid weekly) if you meet the criteria. For example, if you are paid monthly and join the company in February, you will be eligible to join the AHBRSP from 1 May, provided the online AHBRSP Application Form is completed and submitted to Alliance Healthcare & Boots Pensions before the date your membership is due to start.

    If your form is received too late for processing, you may initially be enrolled in the AE Scheme if you meet the criteria, then moved to the main AHBRSP the following month. In such circumstances you do not need to opt out (unless you are within the 30-day opt-out period and want your money back) as your contributions, both old and new, will be recorded and held under the one pension policy.  

  • What should I do if I already have a personal pension scheme?

    What should I do if I already have a personal pension scheme?

    Even if you already have a personal pension, we will still have to assess whether you should be enrolled in the AE Scheme. If you meet the criteria, you will be enrolled and benefit from a contribution paid by your employer. 

  • Can I have a personal as well as a workplace pension?

    Can I have a personal as well as a workplace pension?

    It is possible to have both a workplace and personal pension, or you can opt-out of one or the other. You will need to consider this carefully, as the right decision for you will depend on your personal circumstances. You may wish to speak to an independent financial adviser (IFA) before making a decision. 

Benefits

  • How much is in my pension pot?

    How much is in my pension pot?

    As well as your annual pension benefit statement from Legal & General, you can check your progress anytime by logging into Manage Your Account (MYA).

  • When can I retire?

    When can I retire?

    The normal retirement age for Walgreens Boots Alliance employees is 65. The earliest you can take your company or personal pension is 55. The age when you can claim a State pension is different and depends on when you were born.

    You do not have to retire from Walgreens Boots Alliance at 65. With your employer’s consent, you can continue working and paying into your pension, if you want to.  

  • What happens when I retire?

    What happens when I retire?

    If you are a member of the AHBRSP or AE Scheme, you can use the money that has built up in your Retirement Savings account however you want:

    • you can take it as cash (in one or several lump sum payments)
    • you can use it buy an annuity with the remaining funds
    • you can keep it invested and gradually take an income from it.

    If you are a member of the Boots Pension Scheme, your options are different and you should click here to find out more. You should consider taking independent financial advice to help you with your retirement decisions.

    You can also find out more about your options on this website: www.pensionwise.gov.uk  

Automatic enrolment

  • What is automatic enrolment?

    What is automatic enrolment?

    In October 2012, new regulations took effect in the UK making it compulsory for employers to automatically enrol eligible employees into a workplace pension and for both the employer and employee to make contributions towards it. This is known as ‘auto-enrolment’. Once enrolled, employees have the option to leave the scheme (opt out). 

  • What pension arrangement does Walgreens Boots Alliance use for auto-enrolment?

    What pension arrangement does Walgreens Boots Alliance use for auto-enrolment?

    The Alliance Healthcare & Boots Retirement Savings Plan (AHBRSP) is a ‘qualifying scheme’, which satisfies the Government’s current requirements, so it is being used for auto-enrolment. A separate section of the AHBRSP was created specifically for this purpose, the Auto-Enrolment Scheme (AE Scheme). 

  • How is auto-enrolment different from the main AHBRSP?

    How is auto-enrolment different from the main AHBRSP?

    As enrolling eligible employees into a workplace pension is now a legislative requirement, there are certain rules the Group must comply with. The main differences are:

    • contribution levels (minimum contributions start at 3% for employees and 2% for employers)
    • the definition of pensionable pay on which contributions are paid
    • life cover (members of the AE Scheme do not receive death-in-service life cover).  
  • What are the criteria for auto-enrolment?

    What are the criteria for auto-enrolment?

    Employees on our UK payroll (including temporary employees) who:

    • are not currently a member of a qualifying scheme, such as the AHBRSP
    • earn over £10,000 a year (a Government threshold, which may change)
    • are aged 22 or over but under State Pension age, and
    • work, or usually work, in the UK.  
  • If I do not wish to be enrolled, can I leave the Scheme?

    If I do not wish to be enrolled, can I leave the Scheme?

    If you have been automatically enrolled in the AE Scheme, you can choose to leave (opt out) at any time. If you opt out within one month of being notified that you have been enrolled, you will receive a refund of the employee contributions deducted from your pay. If you choose to leave the Scheme after that first month, a refund is no longer possible and both employer/employee contributions will remain invested in the AE Scheme until retirement (click here for details on how to opt out). 

  • Can I opt out in advance, before I am enrolled?

    Can I opt out in advance, before I am enrolled?

    No, it is not possible to do this in advance. You can only leave the Scheme (opt out) once you have been enrolled. To do so, you will have to wait until you have received the Notification Letter from Legal & General. 

  • How will I know if I have been enrolled?

    How will I know if I have been enrolled?

    For any employee who has been enrolled, two things will happen:

    • they will receive a Notification Letter from Legal & General advising them that they have been enrolled and providing further information;
    • a deduction will be made from their pay and this will show on their payslip.  
  • I will turn 22 years old on my next birthday. Will I be auto-enrolled?

    I will turn 22 years old on my next birthday. Will I be auto-enrolled?

    When you reach age 22, we will assess whether you should be enrolled. If you meet the criteria, then you will be enrolled in the AE Scheme and benefit from employer contributions. If you are going to be enrolled, you will be provided with more information nearer the time and once you have been enrolled you will receive a Notification Letter from Legal & General explaining your options. This will be sent to your home address. 

  • If I am a temporary member of staff, will I be enrolled?

    If I am a temporary member of staff, will I be enrolled?

    If your contract of employment is with any Walgreens Boots Alliance UK-based employer and you meet the criteria, then you will be enrolled in the AE Scheme. If your contract is with an agency, you will not be enrolled by us and should speak to your agency to find out more. 

  • Can I change from the AE Scheme and join the main AHBRSP at any stage?

    Can I change from the AE Scheme and join the main AHBRSP at any stage?

    Yes, but death-in-service life cover may be subject to medical underwriting (and therefore not guaranteed) if you did not join the AHBRSP at the first opportunity.

    If you wish to trade up to the AHBRSP, you should complete and submit the online AHBRSP Application Form. Alliance Healthcare & Boots Pensions in Nottingham will then arrange to switch you from the AE Scheme to the main AHBRSP and for the contributions to be amended. You will receive an acknowledgement letter confirming this. 

  • What happens if my circumstances change?

    What happens if my circumstances change?

    This will depend on your individual circumstances. For example, if you turn 22 years old and earn enough to trigger auto-enrolment, you will be enrolled in the third pay period after you qualify. You can then opt out if you wish to, or remain a member of the AE Scheme and start saving for retirement. If you opt out within one month of being notified that you have been auto-enrolled, you will receive a refund of the contributions that were taken from your pay.

Contributions

  • Do I pay contributions on all my salary?

    Do I pay contributions on all my salary?

    If you join the AE Scheme, the rates of contributions do not apply to all of your salary. They are based on earnings between £6,032 and £46,350 (2018/19). This is usually referred to as ‘Qualifying Earnings’ or ‘Band Earnings’ and include things like overtime, bonuses and Statutory Sick/Maternity/Paternity Pay.

    If you join the AHBRSP, the rates of contributions apply to all of your Retirement Savings Pay, which includes contractual basic salary, company sick pay and statutory payments (eg Statutory Sick Pay and Maternity Pay). It does not include exceptional payments (e.g. unsocial hours premiums, shift pay, bonus, honoraria, overtime and car allowance). Please note, for the purpose of the life assurance death benefit, Retirement Savings Pay is your most recent contractual basic salary.

  • What are ‘Band Earnings’?

    What are ‘Band Earnings’?

    2018/19: contributions are paid on earnings between £6,032 and £46,350 (between £503 and £3,862 a month, between £116 and £891 a week).

    For example, if someone earns £18,000 a year, then contributions are calculated on the difference between £6,032 and £18,000 which is £11,968. The Government intends to review these levels from time to time.  

  • Will AE contributions remain at the same level?

    Will AE contributions remain at the same level?

    No. Automatic enrolment has been in place since 2012 and the Government always planned to increase contribution levels. The next increase will take place in April 2019.

    If you’re a member of the AE Scheme, you’re currently contributing 3% and from April 2019 you’ll start paying 5%. Your employer’s contribution will also go up, from 2% currently to 3%.


    Employee (gross)Employer (gross)Total (gross)
    From April 2018
    3%2%5%
    From April 2019
    5%3%8%
  • Why are AE contributions going up?

    Why are AE contributions going up?

    People are living longer, many don’t save enough for retirement and the State Pension is unlikely to meet their current living standards. The Government wants to encourage everyone to save for the future, so has put in place these new rules which all UK businesses must comply with.

  • Do I need to do anything when AE contributions go up?

    Do I need to do anything when AE contributions go up?

    No, the increase will be automatically processed through Payroll from the April pay period. The next increase takes place in April 2019.

  • What happens if I don’t want to pay more?

    What happens if I don’t want to pay more?

    The minimum is set by the Government, so you can’t pay less than 3% from April, but you can opt out of the AE Scheme if you want to. You should give the decision careful thought as it means you’ll have less in your pension pot when you come to retire.

  • If I choose to opt out from the AE Scheme, what happens to my contributions?

    If I choose to opt out from the AE Scheme, what happens to my contributions?

    If you opt out within one month of receiving the Notification Letter from Legal & General, any contributions taken from your pay will be refunded and you will be treated as if you had never joined in the first place.

    If you opt out after one month, a refund is no longer possible and both employer and employee contributions will remain invested until retirement.  

  • If I opt out within one month, when will contributions be refunded?

    If I opt out within one month, when will contributions be refunded?

    This will depend on whether you have taken action before or after the payroll cut-off date. For example, any money taken from your May pay will be refunded in either June or July (depending on whether you inform Legal & General before the monthly payroll cut-off date). Late notification may result in two contributions being deducted and then refunded. 

  • Can I contribute more than 3% to the AE Scheme?

    Can I contribute more than 3% to the AE Scheme?

    No. If you are thinking of making higher contributions, you should consider whether this is the best scheme for you. Higher levels of contribution can be made into the main AHBRSP.

  • How will my contributions be paid?

    How will my contributions be paid?

    Contributions are made under SMART (salary sacrifice). With SMART, members of the scheme give up (sacrifice) a percentage of their pay in exchange for the employer paying an equivalent amount into a pension scheme. This means that both the employee and the employer pay lower National Insurance contributions. 

  • What is Salary Sacrifice (SMART)?

    What is Salary Sacrifice (SMART)?

    It’s when you ‘give up’ part of your gross salary in return for your employer paying in an extra amount, on top of its usual contributions. Your salary is reduced by this amount because of the pension contribution, but your actual take-home pay will be boosted as you end up paying less tax and NI.

  • Do I have to pay contributions using SMART?

    Do I have to pay contributions using SMART?

    No. You can opt-out of SMART if you want to and make contributions from your gross pay.

    If you have been automatically enrolled and you do not want contributions paid under SMART, you will need to notify Payroll as soon as you have received the Notification Letter from Legal & General.

    After that, you would normally only opt-out or change your contributions in April each year or where you have a lifestyle change such as a marriage, birth, divorce or a significant change to your working hours.

    If you are a member of the AHBRSP you can complete a SMART Opt Out Form and return it to the Alliance Healthcare & Boots Pensions. If you have been enrolled in the AE Scheme and you want to opt out of SMART, you should contact your Payroll Department.  

  • When AE contributions increase to 5% in 2019, what happens to AHBRSP contributions? Will contributions be reviewed?

    When AE contributions increase to 5% in 2019, what happens to AHBRSP contributions? Will contributions be reviewed?

    At this stage there are no planned changes to AHBRSP contributions, but this will be kept under review. If we need to make changes, they will be communicated in good time, ahead of the 2019 AE Scheme increase. 

  • What happens to my contributions in the event of death in service?

    What happens to my contributions in the event of death in service?

    These will be refunded as a lump sum death benefit. 

Investments

  • Why invest?

    Why invest?

    The aim of investment is make your Retirement Savings account increase in value. Your entitlement under the AHBRSP/AE Scheme is to the value of your account rather than the underlying investments themselves, which are held in the name of the Scheme’s Trustee. 

  • Isn’t investment risky?

    Isn’t investment risky?

    Yes, but it is important to remember that there are different kinds of investment risk. There is the risk that the value of your investments can fall. You have probably heard the phrase ‘The value of your investments can go down as well as up,’ which is used in financial advertising. But there is also a risk that, over the long term, the value of your investments can be eaten away by inflation. The secret of successful investment is balancing these two kinds of risk by using different types of investment at different times. 

  • What is the Default Fund?

    What is the Default Fund?

    The Default Fund is a multi-asset fund which aims to provide long-term growth by spreading investment risk across different assets. It is where your contributions are automatically invested, but you can select a different fund or funds once you become a member. You can find more details about the Default Fund in the L&G Factsheet.

  • Where can I find out more about my investment options?

    Where can I find out more about my investment options?

    For more information, please refer to the Legal & General Key Features and WorkSave Pension Investment Options guides, which can be found on their website www.legalandgeneral.com/ahbrsp

Making changes

Other schemes not covered in this website