NOW:Pensions vs Other Pension Options for Your Retirement

NOW:Pensions offers a range of features that make it an attractive option for your retirement savings. You can contribute up to 100% of your income to your pension, with no upper limit on how much you can pay in.

One of the key benefits of NOW:Pensions is its low charges, which are capped at 0.75% per year. This means you can keep more of your money and watch it grow over time.

NOW:Pensions also offers a range of investment options, including a default fund that's designed to provide a balanced portfolio. You can choose from a range of funds, or opt for a more hands-off approach with the default fund.

With NOW:Pensions, you can take control of your retirement savings and make informed decisions about your investments. By contributing regularly and taking advantage of the low charges, you can build a secure financial future.

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The NOW: Pensions trustee believes that ESG issues and sustainability impact are necessary to mitigate risks and enhance returns in the long term.

The report "A Legal Framework for Impact" found that investors should consider systemic risks material to their investments, and most jurisdictions have a legal duty to pursue sustainability outcomes when those outcomes could affect financial returns.

The key concept of "Investing for Sustainability Impact" (IFSI) describes activities that involve an investor intentionally attempting to bring about assessable behavioural changes aligned with positive sustainability outcomes.

IFSI is not a legally defined expression, but rather a concept that describes two approaches: instrumental, where sustainability impact is a means to realising financial return goals, and ultimate ends, where sustainability impact is a distinct goal pursued alongside financial return goals.

The NOW: Pensions trustee adopts a sustainability approach aligned with instrumental IFSI, pursuing positive impact where it is believed to enhance the financial prospects of its investment strategy.

The fund has identified three key sustainability priorities: gender equality, climate action, and living wages.

These themes are mutually reinforcing, for example, jobs held by women are more likely to alleviate poverty and inequality, reducing systemic financial risks in the long term.

By prioritizing these areas, NOW: Pensions aims to ensure that members and their dependents can enjoy a quality of retirement and life that is similar to or better than what is currently possible.

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NOW:Pensions is a leader in promoting equality and diversity, particularly in the UK master trust market. Their focus on gender equality is notable, and they've made significant strides in closing the gender pay gap and gender pensions gap.

Their Portfolio-level Sustainability Goal targets systemic issues caused by the gender pay gap and the gender pensions gap, aiming to achieve tangible improvements in gender equality. This goal is a social imperative that has material financial implications.

The NOW:Pensions trustee has engaged policymakers and advocated for policies that address the gender pay and gender pensions gap. They've also engaged their investment managers to use their voting rights to support shareholder resolutions that advocate for gender equality and vote against boards that are insufficiently diverse.

To measure progress, they use an ESG dataset and assessment of engagement activities, reporting through voluntary and regulatory disclosures like the Gender Pensions Gap report and the Statement of Investment Principles (SIP).

NOW:Pensions offers a comprehensive and accessible pension solution that benefits both employees and employers. Its commitment to regulatory compliance, member engagement, and flexible contribution options makes it a valuable component of employee benefit programs.

Financial security in retirement is a top priority, and NOW:Pensions helps employees achieve this goal through regular contributions from both employees and employers, which accumulate over time to build a substantial retirement fund.

Employer contributions are often matched by the employer, effectively increasing the total amount saved without additional cost to the employee. This is a significant benefit, as it shows that the employer is invested in their employees' financial well-being.

NOW:Pensions also offers a tax-efficient solution, with contributions collected before income tax is applied, providing immediate tax relief and enhancing the growth potential of the pension pot.

Investment growth is a key feature of NOW:Pensions, with professional management of contributions aiming to achieve long-term growth, increasing the value of members' pension savings.

Employers can also benefit from using NOW:Pensions, as it assists them in fulfilling their legal duties under the Pensions Act 2008, ensuring eligible employees are enrolled in a qualifying workplace pension scheme.

NOW:Pensions provides a cost-effective solution for employers, offering a valuable employee benefit without imposing significant financial burdens. This is a significant advantage, as it allows employers to offer a competitive benefits package without breaking the bank.

The online portal provided by NOW:Pensions streamlines the process of enrolling employees, managing contributions, and maintaining compliance, reducing administrative workload for employers.

NOW:Pensions also offers a range of special features, including a Master Trust Structure, which ensures high standards of governance and member protection.

Employers have the flexibility to set contribution rates that align with their business needs while complying with minimum legal requirements, allowing for a tailored approach to pension contributions.

Here are some of the key benefits of using NOW:Pensions:

NOW is pretty much the same as most other pensions, a money purchase pension where you pay in and the government adds tax relief on top.

The fees NOW charges are slightly different to other pensions, with a monthly admin fee of £1.50 and an annual fee of 0.3% on your savings.

Unlike a personal pension, it's not possible to continue to pay into your plan yourself if you leave your employer.

The fees you are charged for NOW are broadly similar to those of Nest and The People's Pension, which is no surprise given that all three were set up to run auto-enrolment workplace pensions.

The type of investment funds you can choose with NOW are also similar to those offered by Nest and The People's Pension.

The support you receive for your pension plan with NOW is focused online, just like with Nest and The People's Pension.

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NOW:Pensions' goal setting approach is centered around promoting pension equality and addressing gender equality issues in investee companies. The trustee has set a goal to address gender equality issues through stewardship activities focused on board representation, workforce diversity, gender pay, and pensions equity.

For another approach, see: Gender Pension Gap

The PRI (Principles for Responsible Investment) is an investor initiative that NOW:Pensions is a part of, working in partnership with UNEP Finance Initiative and UN Global Compact. This partnership aims to promote responsible investment practices and advance the aims of the PRI.

NOW:Pensions actively campaigns for pension equality, striving to ensure fair pension outcomes for all members. The trustee has engaged with third-party managers and its investment manager to support companies and shareholder resolutions that advance these aims.

To achieve its goal of pension equality, NOW:Pensions employs targeted communication strategies to engage members, providing education and resources to help them make informed decisions about their retirement savings.

NOW:Pensions has been successful in influencing government policy, with some of its positions being adopted in the Extension of Automatic Enrolment Act. The gender pensions gap issue has also gained prominence on the government's agenda with the new DWP Gender Pension Gap report launched in 2023.

The trustee's commitment to pension equality is reflected in its goal to address gender equality issues in investee companies. This approach is in line with the PRI's principles for responsible investment.

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The legal landscape for NOW:Pensions is shaped by a growing recognition of the importance of sustainability in investment decisions.

In 2021, a report by Freshfields Bruckhaus Deringer found that investors in all 11 jurisdictions covered by the analysis should consider the systemic risks material to their investments.

Investors like NOW:Pensions have a legal duty to pursue sustainability outcomes when those outcomes could affect financial returns.

The report was commissioned by the PRI, UNEP FI and the Generation Foundation, highlighting the collaborative effort to address the intersection of law and sustainability.