Pension FAQ



Can I transfer any kind of pension into Nutmeg?

You can transfer SIPPs, personal pensions and other defined contribution pensions to Nutmeg, so long as you haven’t started to take income from them – also known as ‘drawdown’.

Nutmeg now also accepts most defined benefit (DB) pension transfers. These are sometimes known as final salary pensions.

Customers transferring DB pensions valued over £30,000 must obtain specialist financial advice before transferring. A suitable adviser can be found through the government’s Money Advice Service retirement adviser directory.

DB pensions valued at less than £30,000 can be transferred without financial advice. You must sign a declaration stating that you are aware of the product features you’ll be losing and remain comfortable transferring.

We still won’t be accepting DB pension transfers from local authority pensions or the Universities Superannuation Scheme.

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Does the government pay into my Nutmeg pension?

The government adds 25% of any contributions you make to your pension pot, up to the value of your total annual earnings. So, if you pay in £10,000 for example, the government will add £2,500. One of the big advantages of a Nutmeg personal pension is that we will add this amount to any contribution you make straight away, so you get to benefit from having the money invested in your pension pot as soon as possible. If you pay 40% or 45% income tax you may be able to claim back even more from the government by filling in an annual tax return form.

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How long does it take to transfer a pension to Nutmeg?

The majority of pension transfers take 2-3 weeks in total to complete. Some can take around three months, depending on your provider.

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I can’t find my pension information - what should I do?

You’re not the only one. The government provides a handy Pension Finder service for just these occasions.

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How much should I save into my pension pot?

This is a very common question. How much you need to invest for your retirement, or how long for, is a very personal decision and is dependent on a number of factors: your age, how much you have saved already, the lifestyle you want in later life, when you plan to retire and your personal circumstances. We have several articles on our blog that might help you. You could try Investing for the future: do you have a plan for retirement? and our Pension calculator for a start.

As with all investing, your capital is at risk. The calculator is not a reliable indicator of future performance.

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How much can I expect to get back?

When you start a Nutmeg pension we show you a forecast of how much you might accumulate over time, based on the information you entered. The figures are designed to give you a clear picture of what you might get from your pension pot as you approach retirement. They're shown in today's money after inflation of 2%.

We calculate the expected average returns for each pension pot portfolio, as well as the spread of likely outcomes, using historical data. We look at the estimated returns for a portfolio of equities and government bonds in different percentages depending on the portfolio risk level. In general, the higher the risk of a portfolio the greater the proportion of equities — both in the UK and overseas — and a higher level of expected return. Find out more about our fees.

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How much do you charge for managing my pension?

Charges vary depending on the investment style you select.

Across all fully managed and socially responsible portfolios in your Nutmeg account, including VAT where applicable, you pay a management fee of 0.75% on your first £100k and 0.35% for everything beyond. For any fixed allocation portfolios, you pay a management fee of 0.45% on your first £100k and 0.25% on anything beyond. Any underlying fund costs and the effect of market spread are kept as low as possible to help you potentially benefit from better net returns. Find out more about our fees.

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How do you invest the money I put into my pension?

At Nutmeg we build intelligent portfolios that hold many different types of investments in many countries and industry sectors. This approach helps to spread risk and assists us in aiming for good investment returns. We typically use exchange-traded funds (ETFs) to invest your money as they are a good, low-cost way to give you exposure to a large number of investments. For the fully managed and socially responsible investment styles, we constantly monitor and track global markets in line with your portfolio and make adjustments to your investment style and risk profile as we endeavour to improve your net returns. For fixed allocation portfolios, we’ll keep you invested in assets matching your risk level, reviewing them once a year to make sure they’re still right for you.

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Can I transfer out of Nutmeg if I’m not happy?

Yes, you can always transfer your Nutmeg pension to another provider. Sometimes our life circumstances change and we believe our customers should have the freedom and flexibility to make changes to their investments as they wish. If you do choose to transfer your pension out of Nutmeg, always check with your new provider first to make sure you’re not losing out on any pension benefits as a result of switching or paying additional charges you may not be comfortable with.

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Can my employer also pay into my Nutmeg personal pension?

If your employer currently makes contributions to a personal pension, the answer is most likely yes. If your employer is not already set up with Nutmeg, get in touch and we can provide you with the details you’ll need to give to your HR department. Remember, you’ll need to complete the set-up of your Nutmeg pension account as well.

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Does Nutmeg have a SIPP? Is the Nutmeg pension a SIPP?

No, a Nutmeg personal pension is slightly different to a SIPP (or self-invested personal pension). A SIPP allows you to make decisions about how the money in your pension is invested. Whereas if you have chosen to take out a Nutmeg pension then you have chosen to have Nutmeg make the investment decisions on your behalf.

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How often do I get statements?

You can log in whenever you want to see where your pension pot is invested and how it’s performing. Your online account will show you which investments you hold, how your pension has changed in value over time and a breakdown of our management fee and any underlying fund charges. We will also send you a valuation statement four times a year.

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What are my options when I reach retirement age?

When you reach 55, you have a number of options when it comes to your pension, including:

  • Staying invested – you don’t have to act immediately
  • Taking up to 25% of your pension pot tax free
  • Taking income from it while it (hopefully) grows in value – known as ‘drawdown’, subject to income tax
  • Securing a guaranteed income by purchasing an annuity

The annuity gives you a fixed guaranteed income whereas the drawdown will vary depending on the performance of your investments. Nutmeg offers drawdown in partnership with our pension administrator Hornbuckle. If you hold a personal pension with Nutmeg and you’re approaching 55, you’ll receive an information pack explaining all the details and showing you how to set up drawdown if you want to.

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Why do I get 25% top-up when the basic tax rate is 20%?

This is a common query. It is simply a nuance of how you view the calculation. Basic rate tax is indeed 20% on your salary. So for each taxable £100 you earn, the basic rate of tax you must pay is £20. But to accumulate £100 in your pension pot, you pay in £80 and the government pay back the £20 in tax relief. And £20 is of course 25% of £80.

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Does Nutmeg work with a pension operator?

Your Nutmeg personal pension is invested and managed by Nutmeg. The operator and administrator is Hornbuckle and the trustee is Embark Trustees Limited, a Hornbuckle company. But all contact you receive will be through Nutmeg who can answer any questions you may have.

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My Nutmeg pension is a workplace pension. Is there anything else I need to know?

As the administrator of your workplace pension, we have appointed an independent governance committee to represent the interests of policyholders. 

We appointed PTL as an independent trustee to provide this service, under a Governance Advisory Arrangement (GAA). The GAA is independent of Nutmeg and its main role is to represent the interest of members before raising any concerns with us. 

A copy of the terms of reference between the GAA, Embark Services Limited and Nutmeg can be downloaded here.

As a policyholder, you can share your views on your pension with the GAA by contacting the Nutmeg customer support team on support@nutmeg.com. Please note, while we will acknowledge receipt and ensure that your views reach PTL, they will not contact you directly unless they need more information or clarification.

A copy of the April 2020 PTL Chairs Annual report can be downloaded here

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