Your pension explained

The IMI pension is a defined contribution scheme. This just means that you and IMI pay a fixed amount each month into your pension. The money is then invested until you’re ready to take it when you retire.

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You can access your money from age 55 and you can choose to do what you like with it. This could mean taking it as cash, buying an annuity, taking it through drawdown or even a combination of these options - head to: 'How to take your money' for more on this.

The basics of your pension are really simple:

Lets say you pay in £100.

We pay money in too and will match your contribution, so that's another £100 going in.

The Government gives you back £20.00.

Because this is a SMART scheme, you save £12.00 in National Insurance.

You get £200 going into your pension and because of the tax savings, it has only cost you £68.00 - you can't say fairer than that!

How much do I contribute?

You can choose how much you want to pay into your pension, but by law, this has to be a minimum of 5% of your pensionable salary. To help you get more in your pot, we will match your contribution up to 7%. Can't say fairer than that!

 

If you take the full match and pay 7%, this means, overall, you’ll have 14% going into your pot, but only paying half of that yourself. It’s a great deal, and one that sees you save with security.

 

You can also choose to pay more into your pension (called Additional Voluntary Contributions) as a regular or one-off amount. Just bear in mind that we won’t match those. 

 

You can change your contributions at any time, head to imi-optimize.co.uk

 

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How tax relief works

The government wants everyone to pay into a pension as it knows the State Pension is unlikely to be enough for a comfortable retirement. So as a little boost, it gives you tax back on the money you pay in.

If you’re a basic-rate taxpayer, you’ll get 20% tax relief on the money you pay in. So every £1 you pay in only costs you 80p. And if you’re a higher rate taxpayer, every £1 you contribute only costs you 60p.

 

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Saving more with Smart Pay

 

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You can save even more money by making contributions through Smart Pay - also called salary sacrifice. Smart Pay is an HMRC approved arrangement, which means your pension contribution is taken from your full salary, before any National Insurance (NI) is taken off. This means your gross (pre-tax) salary is lower, so you pay less NI – and your take-home pay is higher. 

Smart Pay might not suit you, though, so you can opt out. For example, Smart Pay can affect benefits, such as tax credits or other state benefits. If you’re not sure whether Smart Pay is right for you, speak to IMI or an Independent Financial Adviser could help you decide. Find one near you

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Who looks after my pension?

Your pension is provided by the Mercer Master Trust, which is administered by Scottish Widows. There’s a lot more detail about this on the Scottish Widows site – take a look if you’d like to know more.

Find out more

Pension Basics

Watch our video below to find out more about pension savings, investments and the Mercer Master Trust (MMT).