Your contributions and pension benefits
Discover more about the payments you make towards your Magnox Group pension and the wide range of benefits it offers you. Select the specific topics from the list below to read more.
How the reformed SLC section works
Your reformed SLC pension is made up of two elements:
- your pension before 1 April 2024, which is your Final Salary pension, and
- your pension on, and after, 1 April 2024, which is your CARE pension
What you get when you retire will be based on both of these elements combined (Final Salary pension + CARE pension). You can find out more about each element below.
Final Salary
This is a defined benefit (DB) pension that pays a guaranteed level of benefits every year.
How much you get is based on your final pensionable salary and the years of service you’ve contributed in the Scheme, as defined below.
You can read more about how your Final Salary pension is calculated in your member booklet.
Members in the reformed SLC section stopped building up new final salary pensionable service on 31 March 2024.
Final Salary benefits built up until then are held within the Scheme and can be taken alongside your other benefits when you retire. Benefits built up since then are done so on a CARE basis as outlined below.
- Pensionable Salary – the salary you’ve earned, not including overtime or other varying payments, plus pensionable allowances
- Pensionable Service – all the years you've been an active members of the Scheme, including any transfer ins you may have and/or any added years you may have bought
CARE
From 1 April 2024, all SLC active members not covered by the Scottish Protected Person regulations started building up a career average revalued earnings (CARE) pension.
CARE is also a DB pension, which means it pays a guaranteed level of benefits every year.
As part of CARE, your pension is based on your pensionable salary throughout your time in work, and increases to keep its value against inflation.
Your contribution payments
The amount you contribute depends on how much you earn. This is set out in the table below.
Contribution and salary bandings applicable from 1 April 2025:
| Salary bands | If your previous final salary contribution rate was 0%, your new contribution rate is: | If your previous final salary contribution rate was 5%, your new contribution rate is: | If your previous final salary contribution rate was 6%, your new contribution rate is: |
| £14,181 or less | 6% | 5% | 6% |
| £14,182 - £55,436 | 6.66% | 6.33% | 6.66% |
| £55,437 - £193,379 | 8% | 7% | 8% |
| More than £193,379 | 8% | 7% | 8% |
The salary bands are increased each 1 April by the annual increase in the previous September’s Consumer Prices Index (CPI) (rounded to the nearest pound). You can see contribution rates for previous years on the PDF below.
It’s not just you who pays in to your Scheme pension, your employer also pays in and shares the cost with you.
For more information on how contributions are invested please refer to your latest Pensions Update newsletter or Scheme Report and Accounts.
Boosting your pension
You can choose to pay in more to boost your main pension savings. You can do this by paying AVCs or buying Added Pension.
Keep in mind that there is a limit on the total amount you can pay into all of your pension arrangements each tax year before tax will be charged. This is known as the Annual Allowance (AA).
If you exceed this amount and are liable for an Annual Allowance (AA) tax charge of £2,000 or more, you can elect for the Magnox Group to pay some, or all, of the charge on your behalf, rather than you pay it directly. This is known as Scheme Pays.
When you retire, the total amount due, will be deducted from your benefits. How this is done depends on whether or not you have an AVC pot.
You are responsible for letting HMRC know if you exceed the Annual Allowance limit . This can usually be done via self-assessment.
The Scheme Pays principle explained here may apply primarily to the Final Salary element of your whole benefits (Final Salary + CARE). The Trustees will monitor this approach to ensure it remains suitable.
If you are interested in using Scheme Pays to pay an AA charge, please contact the Scheme administrator, Railpen.
The Annual Allowance (AA)
Read more about the Annual Allowance, how to know if you've exceeded it and how you can use Scheme Pays to pay any AA charges on the tax allowances page.
Reducing your payments
There may be times in life when payments to your pension need to change.
You cannot change your contributions to the Scheme as this is set by the rules of the Scheme, but you may be to change your AVCs. However there are times when the amount taken may change automatically, such as during family leave or a career break.
Both the Financial Conduct Authority (FCA) and the Pensions Regulator (TPR) believe that it will be in most peoples' best interests not to leave their defined benefit pension.
Go to the changes to circumstances page for more information. You can also read your member booklet.
SMART Contributions
If you are employed by NRS, you may be part of your employer’s SMART pensions arrangement.
SMART, also known as salary sacrifice, is an arrangement in place to help reduce the amount of National Insurance (NI) contributions you pay while building up your pension benefits.
Please speak to your employer if you have any question regarding SMART.
MoneyHelper
Your pension benefits while you're working
A great way to plan for your future is to make the most of your Scheme membership now.
Making the most of it while you’re still working, could put you in a better position once you retire. It’s important to understand what you’re entitled to, and the options available to aid your pension saving journey with the Scheme.
Some of the benefits include:
Death benefits mean you’re looking out for your loved ones
If you die before taking your pension your loved ones might get a tax-free lump sum. You can tell the Trustee who you would like to get this by making a nomination when you log in to your myESPS account. Your dependants - such as your family - may also get a pension.
For more information, please check your member booklet.
You can save even more
You have the option to ‘top-up’ your main pension savings by paying Additional Voluntary Contributions (AVCs). It’s a tax-efficient way to pay extra and save more for the future.
You can find out more about AVCs and how they work on the boosting your benefits page.
AVCs and Added Pension can be particularly helpful if you:
- have extra earnings such as bonuses or overtime
- are thinking about taking your benefits early (subject to eligibility), or
- want to save a bit more towards your future
Your pension benefits when you retire
Being a member of the reformed SLC section of the Magnox ESPS means you get a range of valuable benefits, both while you’re working and once you’ve retired.
When you retire as a reformed SLC section member...
You will get a pension for life when you retire
This will be based on your salary and how long you’ve been a member of the reformed SLC section.
You have options on how to receive your pension. For example, you can:
- exchange part of your pension benefits to provide additional pension for a spouse or another dependant when you die
- receive a greater lump sum than your standard one, in exchange for a lower annual pension
- take no lump sum and receive a greater annual pension
It’s important that you understand the benefits and limitations of each of these options before making a decision. Go to the taking your benefits page for more information.
If you’ve been paying AVCs, you will have further options.
Once you start receiving your pension, it increases from April every year. You can go to the pension benefits and increases page for further information.
You can get a tax-free lump sum
You may be able to take up to 25% (but no more than £268,275) of your pension benefits as a tax-free cash lump sum.
You may be able to receive more of a tax-free lump sum if you have applied to and received either enhanced or primary protection from HM Revenue & Customs (HMRC) with lump sum protection. Different terms and conditions apply to each of these protections. Your certificate will contain details of any lump sum protection.
If you have fixed or individual protection relating to the Lifetime Allowance (LTA), the amount of tax-free lump sum you can take is normally limited to 25% of the value of your protection.
Tax is taken from your pension payment before you receive it, based on a tax code supplied by HMRC.
Your dependants could be entitled to death benefits
This may include:
- a lump sum – this will depend on how long you’ve been receiving your pension. Different conditions may apply if you retired early due to ill health.
- a pension – this could be for a spouse, children or other dependant
You can find out more on the nominations and death benefits page, including information on benefits if you die after you’ve retired.
The impact of Scheme Pays on your benefits
If you are liable for an Annual Allowance (AA) tax charge of £2,000 or more, you can elect for the Magnox Group to pay some, or all, of the charge on your behalf, rather than you pay it directly. This is known as Scheme Pays.
In this instance we record the amount of AA charge paid on your behalf as a notional negative amount.
We then charge you interest on the amount of tax paid each April. This is done up until the time you retire/transfer, at an interest rate set by the Scheme Actuary.
When you retire, the total amount due, will be deducted from your benefits. How this is done depends on whether or not you have an AVC pot, as explained below.
The Annual Allowance (AA)
You can find out more about the Annual Allowance (AA) on the tax allowances page.
- If you have an AVC pot
If you have an AVC pot and you opt for the Scheme to pay some or all of your AA charge, then it will be taken from your AVC pot at the time it is paid to you.
- If you do not have an AVC pot
If do not have an AVC pot and you opt for the Scheme to pay some or all of your AA charge, then the benefits that you get when you retire/transfer will be reduced in order for the Scheme to recover the tax paid on your behalf.
If your pension savings in the Magnox Pension Scheme are greater than either the AA or the Money Purchase Annual Allowance (MPAA), then we will send you a Pension Savings Statement (PSS) that will detail the benefits savings for the relevant period.
Your Annual Benefit Statement (ABS) will also give you an indication of how much of the AA you have used in respect of your savings in the Scheme. However, you will need to factor in the amount of savings you have built up in any other pension schemes that you are a member of separately.
Please keep in mind that you are responsible for letting HMRC know if you exceed the Annual Allowance . This can usually be done via self-assessment.
As a member of the SLC reformed section, the principles explained here may apply primarily to the Final Salary element of your whole benefits (Final Salary + CARE). The Trustees will monitor this approach to ensure it remains suitable.
If you are interested in using Scheme Pays to pay an AA charge, please contact the Scheme administrator, Railpen.
