PENSIONS

Pension FAQ

Can I transfer any kind of pension into Nutmeg?

You can transfer SIPPs, personal pensions and other defined contribution pensions Nutmeg, so long as you haven’t started to take income from them – also known as ‘draw down’. We can’t accept transfer of defined benefit, or ‘final salary’, workplace pensions right now.

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.

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.

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.

How much should I save into my pension pot?

This is a very common question. How much you need to save 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 Are you saving enough for your retirement? and our Pension calculator for a start.

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 2.5%.

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 fee

How much do you charge for managing my pension?

Nutmeg pensions are managed portfolios. Across all managed portfolios in your Nutmeg account, including VAT you pay 0.75% on your first £100k and 0.35% for everything beyond. Fixed allocation portfolios are not available for a Nutmeg pension. Any underlying fund costs and the effect of market spread are kept as low as possible to help you benefit from better net returns. Find out more about our fee

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 in order to help spread risk and the opportunity for good investment returns. We typically use exchange-traded funds (ETFs) to invest your money as they are a good, low-cost way of giving you exposure to a large number of investments. We constantly monitor and track the global markets in line with your portfolio and will make adjustments to your investments as we endeavour to improve your net returns.

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.

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.

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

SIPP stands for Self-Invested Personal Pension. Strictly-speaking the Nutmeg personal pension isn’t a SIPP because we make the investment decisions on your behalf — that is, you don’t ‘self-invest’ it. But apart from that technicality, the Nutmeg pension works very much the same as a SIPP.

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 four times a year.

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.

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.

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.

Transfer a pensionStart a pension

As with all investing, your capital is at risk. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest. Pension rules apply and tax rules may change in future. Please note that during any transfer, your investments will be out of the market. If you need help with pensions, seek financial advice.