Pension FAQs

Hello and welcome! Today we are going to be talking pensions.

One of the benefits you have of working for Deutsche Bank is that you’re a member of a workplace pension scheme, so you’re already saving for your future.

My name is Greig and I am presenting today on behalf of your pension scheme provider, Standard Life.

I am going to help you understand how your pension plan works and what the benefits are of being a member of the scheme.

So, this is what are we going to cover today

The Future, how much might you need

How your pension plan works. Deutsche Bank contribute into your plan for you but you can make additional contributions too. We will also cover investments. When we look at investments it’s important to note that your pension savings are invested to give your money the potential to grow, although the value can go down as well as up, and you could end up with less than what was paid in. How you access your pension is your choice and we will look at these options too.

Combining other pensions

Online support and tools

And finally where to find useful resources and get further guidance.

Before we get started, please just note that this session is only for information and isn’t financial advice. If you’re not sure about your options, please seek financial advice.

Note: Law and tax rules may change in the future. Your own circumstances and where you live in the UK will also have an impact on tax treatment.

Before we can work out how much you need to save, you need to know how much your ideal retirement might cost you. 

The Pensions and Lifetime Savings Association developed the Retirement Living Standards, which helps you picture what kind of retirement lifestyle you could have. They’ve taken six things that you’ll probably still need to pay for after you retire and, based on your preferences, how much income you’ll likely need to cover it all.

In the table you can see that it’s separated into three different levels of living standards:

Minimum – this covers all your needs, with some left over for fun
Moderate – this gives you more financial security and flexibility
Comfortable – this offers you more financial freedom and some luxuries

This is worked out by breaking down the cost of some of the things that might be important to you.

For example, if you’d be happy holidaying in the UK once a year, that’s likely to be achievable within the ‘Minimum’ income level.

However, if you’d like to spend a few weeks abroad every year and have enough left over for some luxuries, you’ll need to target the ‘Comfortable’ income level.

You may need to add other costs into the mix such as mortgages, rent, social care costs, and any tax on pension income.

As well as the PLSA’s research, our Retirement Income Tool can also help you understand how much you’ll need to save to aim for the retirement you want. I’m going to show you a short video about how it works.

So, how does it all work? We often hear people say they know they’re paying into their workplace pension, but don’t really understand it all.

It can sound complicated, but in simple terms, a pension plan is just a type of long-term investment plan where you save money for your future.

One of the benefits of paying into a pension plan is that it’s normally very tax efficient compared with other types of investments.

Tax rules could change in the future. 

Another benefit for you being part of the company scheme is whilst Deutsche Bank contribute into your plan for you, you can make your own additional contributions. too.

Your money is invested to give it the potential to grow.

As with any investments though, the value can go down as well as up and you could get back less than was paid in Normally you can access this money from age 55, which is rising to 57 on 6 April 2028.

I mentioned earlier that one of the benefits of paying into a pension plan is that your payments are likely to be tax efficient. 'Let’s have a look at how this works.

Deutsche Bank make a contribution into your plan and if you decide to make Additonal Contributions these are made by Salary Sacrifice, via MyFlex.

This works by you agreeing to give up (or exchange) a portion of your salary every month in return for an employer pension payment.

This amount is added to your employer’s contribution and paid in as an employer payment.

By agreeing to reduce your salary, you save on National Insurance payments and reduce the amount that’s subject to income tax.

The payment is then invested in your chosen funds

Salary sacrifice payments don’t affect your non-pension benefits such as overtime or bonus.

It’s a contractual agreement between you and your employer.

Salary sacrifice won’t be right for everyone.

You have the right to pay by non salary sacrifice.

It can affect transactions and borrowing levels that are based on salary.

The Government set a limit on how much you can pay into your pension plan every year without incurring tax charges. This means total payments into all pension plans you might have, including your employer’s payment.

If you’re not sure about how Salary sacrifice might work for you, you may want to get guidance or advice.

Your company pension is one of the benefits of working for Deutsche Bank.

The amount Deutsche Bank pay into your plan depends on when you joined, you can view your own payment details at MyFlex.

The Core Company Contribution % is applied to Base Salary up to the Company Earnings Cap (for tax year 2024/25 £213k)

You can make and change Additional Contributions at any time through MyFlex

You have the option to “Flex Down” part (or in some cases) all of your pension contribution in exchange for cash. See HR Connect for more information.

The Government set a limit on how much you can pay into your pension plan every year without incurring tax charges. This means total payments into all pension plans you might have, including your employer’s payment. We will cover this shortly.

Let’s look at a Higher rate salary example of how salary sacrifice works, here the employee wants to make an Additional Contribution of 5% and there’s an employer payment of 10%.
• The first column shows the salary example, annually 
• The employee monthly payment is next – that’s the amount that’s deducted from pre-tax earnings
• That’s added to the employer payment
• Which gives us the total amount paid into the pension plan
• However, because they will benefit from a 2% National Insurance and a 40% income tax saving, the net cost to the employee, or the difference they’ll see in their take-home pay, is less than their monthly payment

While our examples today show a 5% employee Additional Contribution, you may be able to pay more than this depending on your circumstances and what you feel is best for you.

Figures are subject to rounding.

There are limits for how much you can pay into your pension plan before you incur tax charges and these limits changed from April 2024. We will look at what these limits are now but remember my point earlier, going forward laws and tax rules could change.

You may be aware that the lifetime allowance has been removed and since 6 April 2024 there are two new allowances that restrict the amount of tax-free lump sums you can access. The lump sum allowance places a cap of £268,275 on the amount of tax-free lump sums you can draw from any of your pensions. This is normally the 25% tax free cash that is available you access your benefits. The lump sum and death benefit allowance places a cap on the total amount of tax-free lump sums are available during your life, payable in the event of serious ill health, or paid following your death. Any lump sum in excess of either allowance is subject to income tax at your marginal rate.

Next, we’ll look at the annual allowance for pensions savings and how this affects everyone but can be a greater issue for higher 
earners.

So whilst saving into a pension can be very tax efficient to plan for your future, there are limits on how much you can contribute.

This is called the Annual Allowance for pension savings. All payments into all your pension plans contribute towards it, including employer payments. 

If you have a Defined Benefit, or Final Salary pension plan, it works differently but still counts towards your annual allowance. 

The standard Annual Allowance limit for this Tax Year 2024/25 is 100% of your taxable earnings, capped at £60,000, which ever is the lesser amount.

There are situations where the Annual Allowance can change.

If you’ve used your current year’s Annual Allowance and want to contribute more into this tax year, you might be able to carry forward unused Annual Allowance from the previous 3 tax years.

If you’ve accessed benefits and taken taxable flexible income from a defined contribution pension plan, this will have triggered the Money Purchase Annual Allowance, and you won’t be able to carry any allowance forward.

As well as affecting your ability to carry unused annual allowance forward, the Money Purchase Annual Allowance reduces your Annual Allowance to £10,000. This can apply as soon as you take more than your tax-free entitlement and you have flexibly accessed taxable income from a Defined Contribution pension scheme.

Also, you may have a lower annual allowance if you’re considered a very high earner. 

So from 6 April 2023, if your total income is over £260,000, your Annual Allowance could start to reduce by £1 for every £2 income above this level. That means anyone with a total income of £360,000 or more may have a flat £10,000 Annual Allowance. We’ll look at that in a bit more detail.

If you are not sure about how payment limits could impact you, you might want to consider speaking with a Financial Adviser.

Now let’s take a look at investments

When it comes to investing, there are different choices for you, no matter how confident you feel about investments.

Here’s a quick summary of the options:

First, there’s the default, or low-involvement option. This means that you don’t need to choose which funds to invest in, or how to get your pensions savings ready for retirement. If you haven’t actively made an investment choice, your money will automatically be invested in our default option. It’ll stay there unless you choose to switch investments.

As you’re part of a workplace pension scheme, your employer or their adviser will choose this investment option because it’s generally suitable for most people in the company. And, you have the comfort of knowing that it’s managed by experts on your behalf.

However, it’s still a good idea to check it’s right for you.

For those who’d like a bit more input into where their pension savings are invested, we can help. You can choose from a range of lifestyle profiles, depending on how you intend to take your retirement income and what you think is best for you.

And finally, for those who feel they have the time, knowledge, and confidence in investing - you can self-select from a range of funds, including Responsible Investments and Ethical options.

Just remember that if you self-select your own funds, the onus falls on you to regularly check you’re in the right type of investment as you get closer to retirement.

You can find more information about investments on your company pension website, or by visiting your online dashboard or our mobile app.

It’s important to remember that your pension savings are invested to give your money the potential to grow.

But the value can go down as well as up, and you could end up with less than what was paid in.

So, let’s look at the low-involvement option for DB (UK) DC Pension Plan. If you want to check your own investment details you can access these via MyFlex, via Online servicing or the Standard Life app.

As I said, if you haven’t made any other investment decision this will be where your money is automatically invested and where it will stay.

So, it’s important you consider if this is right for you.

The default option is Universal. When you’re far away from retirement your money will be invested in a fund which offers growth potential over the longer term. 

For this lifestyle profile, 15 years before your chosen retirement date, your money will gradually move into lower risk investments designed to give you the flexibility to take your money the way you want when you retire. 

This will happen automatically – you don’t need to do anything. 

Other lifestyle profiles are available, so you can find one that’s most appropriate for your retirement plans, these include profiles aimed at taking an annuity, flexible income known as drawdown or taking cash lump sums. It's important to think about how you might want to take your retirement income.

If you don’t choose a lifestyle profile but self-select from our wider fund range, you’ll be responsible for making any changes as you get closer to retirement.

When you have a pension there are charges for investing in funds.
Your employer has negotiated with Standard Life to reduce this charge through a rebate.
This is another benefit of being in this workplace pension – you wouldn’t get this discount if you invested in this fund outside the scheme.

The amount you’ll be charged depends on which fund or funds you’re invested in and how much money is in it.

We’re using the Standard Life Sustainable Multi Asset Growth Pension Fund as an example – it’s the growth fund of the scheme lowinvolvement option that we just looked at.
There is a more expensive fund in the low-involvement option.
The fund management charge covers costs of managing your investments.

Additional expenses may be deducted from some funds and include things like trustee, registrar, auditor and regulator fees. 

The rebate is the amount Deutsche Bank has negotiated with SL to effectively reduce the charge. Even if you leave your employer, you’ll keep this discount as long as the plan stays with Standard Life.

Over the long term, the effective total annual fund charge is close to what you will pay.

This is equivalent to £22 for every £10,000 invested.

You will also get a discount if you choose a different investment option/s available for your plan.

Let's now look at how you can take your pension

Now let’s look at your options when you retire. The government set rules about this, and they might be different when you retire, but we’ll explain what the rules are now.

You can normally take money from your pension plan when you reach 55 (rising to 57 from 6 April 2028). 

Before you take money from your pension plan, it’s important to ask yourself if you really need it right away. When and how you take your money can make a big difference to how much tax you might pay and how long your money will last. 

You can usually take 25% of your total pension savings tax-free. It’s important to think about whether this is right for you or if you’d prefer to keep your money invested. Keeping it invested gives your money the potential to grow further. You can take this 25% as one lump sum, a number of smaller lump sums or as regular payments. Withdrawals from the rest of your pension plan will be subject to tax.

There are different ways you can take money from your pension plan.

You can take your pension pot as one or more lump sums over a number of years. 
You can take a flexible income (also known as drawdown) so you can take income when it suits you You can purchase a guaranteed income for life (also known as an annuity).

Remember, how you access your pension pot is your choice. If you are age 50 or over and considering retirement PensionWise can offer you free guidance on your options. Visit moneyhelper.org.uk for more information.

It may be possible to pass on some pension savings when you die. This could go to your beneficiaries in a few different ways. You can tell us who you want to benefit, and we’ll take your wishes into account. You can do this via online servicing or the mobile app. Any pension pots that you leave are usually not liable to inheritance tax.

And if you die before the age of 75, the recipients usually don’t have to pay income tax - although larger lump sums, might be subject to a tax charge.

If you die aged 75 or more, your beneficiaries may have to pay income tax.

Flexi-access drawdown is one of the ways a beneficiary can use an inherited pension pot.

Here’s how it could work:

• Savings remain invested in the pension scheme under an arrangement set up for the beneficiary
• The beneficiary can draw what they need from this pot at any time until the pot is empty, or has been used to buy an annuity
• Drawing income from inherited pension pots doesn’t trigger a reduction in the beneficiary’s annual allowance, so it doesn't restrict their 
ability to fund their own pensions. 

If you’ve used your pension pot to purchase a guaranteed income via an Annuity, then what the beneficiary will receive, will depend upon how you set the annuity. 

You can update your beneficiary details via online servicing or the Standard Life app.

Let’s look at your options if you have more than one pension plan. If you’ve worked for more than one employer, you may do.

I’ll explain why combining other pension plans with this one might be a good idea but also the important things you need to think about before you decide if it’s right for you.

If you have other pensions with other providers, you can consider transferring them to keep them all in one place.

Now, with pension transfers there are a few potential benefits – for example combining your pension into one may make it easier to keep track of, with one online portal to view all your information.

It also means you’d have one provider to deal with which means one annual statement and less admin.

Transferring may also save you money – your plan with Standard Life will benefit from a reduction in charges negotiated by your employer – we call that your scheme rebate - so over the long-haul check if you could potentially be paying less in charges.

However, combining pensions won’t be right for everyone – there are a few important things to consider. For example, there could be exit fees or transfer penalties from your current provider, so you’d need to check this. Another consideration is what type of pension plan you have elsewhere, there may be valuable bonuses or guarantees attached to the plan so you may need to consider financial advice to ensure it is right for you.

You can get information about transferring pensions online and you can start the process via your Online servicing dashboard or the Standard Life app.

You can get information on how your pension plan works plus various retirement planning tools online. 
Support through your online servicing dashboard, mobile app or our websites will continue to evolve so when you visit these you may find new features.

You can view your plan details via MyFlex and also access scheme information at dbpensions.com.

The username and password you set up for online servicing can also be used for the Standard Life mobile app. 
Both by signing in online, or by using the app, you’ll be able to see what’s in your pension pot – and get an idea of what your retirement income could look like.

To help support you with your retirement options there are lots of places to find support;

• We recommend you get appropriate guidance or advice before making any decisions. 
• Gov.uk can give you more information on taxation, state pensions and general pension queries
• Moneyhelper provides government-sponsored financial guidance. From age 50 you can get free impartial guidance from Pension Wise, a service from MoneyHelper. You should visit their website. It's important to shop around and compare providers. Other providers may offer a higher level of retirement income, and access to different options more suited to your individual circumstances.
• Standard Life also supports you in various ways. You can use our pension website standardlife.co.uk for information and guidance, as well as a suite of online tools. You can also send a secure message using the Standard Life mobile app or via our webpage.
• Your employer can also offer support on queries you have relating to employment with Deutsche Bank
• If you’re unsure about what’s right for you or want advice based on your circumstances and your goals speak with your financial adviser. If you don’t have a financial adviser you can find one using the directory at MoneyHelper.

Log in at standardlife.co.uk and download the Standard Life mobile app – registering takes minutes and you’ll need your plan number which can be found on any communication from Standard Life.

Explore the tools and educational material available – it should help you feel more confident about a range of topics, and guide you to making more informed decisions.

Review your payments and charges.

Check in on your investments, do they still meet your needs? You can get more information on your investment options online.

Review your selected retirement age – doing so means you’ll receive communications from us at a more relevant time, help you plan better, and importantly, make sure your investments are aligned.

Add your beneficiaries so we know who your savings should go to in the event of your death – this could be loved ones or charities and causes close to your heart. Your pension benefits aren’t generally covered in your will, if you have one, so it’s important that we know your wishes.

Track down pensions from previous jobs, and if you feel it’s right for you, transfer them into your Standard Life plan. 

Ultimately, your pension is a really valuable employee benefit. It’s very easy to manage and make it work in a way that suits you best. 
And by engaging with your pension now, it can go a long way to helping you invest in your future self.

If you have any question, you can send us a secure message online or via the Standard Life mobile app.

Thank you for listening.