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Royal London began as a friendly society in 1861, later changing to a mutual society in 1908. Over the years it has become the UK’s largest mutual life, pensions and investment company.
Royal London is committed to providing the very best experience and pride themselves on delivering standout service and support.
Royal London’s workplace pension offers employers an easy way to set up a defined contribution scheme for their staff. It also meets auto-enrolment laws and gives your team a head start on retirement planning.
Royal London Workplace Pension Key Facts | |
|---|---|
✅ | Defaqto rating: 5⭐ |
✅ | Type of scheme: Group personal pension |
✅ | Suitable for: All business sizes |
✅ | Funds available: 180+ |
✅ | Financial strength: A (S&P), B+ (AKG), A2 (Moody’s) |
✅ | Tax relief method: Relief at Source / salary sacrifice |
✅ | Employee charges: AMC up to 0.75 % (within default) |
✅ | Employer fees: Often £0 for employer for standard schemes |
✅ | Ethical funds: Several ESG / sustainable funds in their range |
Employers of any size, from any industry, can set up a workplace scheme or move an existing one to a Royal London pension.
Before choosing Royal London, it’s important to understand how it stacks up against other providers. Every business has different needs and what’s right for one won’t be right for another.
As a defined contribution scheme, both the employee and employer make monthly contributions. This is to help workers save enough for a comfortable retirement.
The contributions are then invested into various funds which are managed by a board of trustees. It’s the trustees responsibility to get the best possible return on the investments.
The three sources of contributions to a workplace pension are:
The employee and employer must pay minimum contributions set out by the government. But they can pay more than the minimum if they wish to.
Employees are eligible for automatic enrolment if they are:
Our Workplace Pension specialists can help you find the most suitable scheme for your company. We’ll do the heavy lifting, allowing you to run your business without the additional stress. Make an enquiry to find out your options.
Richard Noble
Senior Consultant, Employee Benefits
There are set minimum contributions that employers and employees must pay into a scheme.
No matter the number of staff, every employer must contribute at least 3% of the employee’s qualifying earnings into their pension fund.
But they can contribute above this. Some employers offer a higher contribution as part of their employee benefits package.
Employees are required to pay a minimum of 5% of their qualifying earnings into their workplace pension. The government pays 1% of the 5% as tax relief into the pension.
Contributions to a Royal London pension are invested so that they grow over time. The aim is to help employees build up a substantial pot of money that they can then draw on in their retirement.
The contributions go into Royal London’s default fund, which is the Balanced Lifestyle Strategy. The fund’s asset managers will oversee this. There are other funds, though, including:
Royal London’s default investment strategy offers a balance between risk and return. The money is invested across equities, which are shares in global companies. The pension pot is also invested in UK property and used as loans to companies and the government as bonds.
This strategy limits risk and gives the savings the best chance of increasing in value. There are ten key companies that the Royal London default fund invests in. These range from technology and manufacturing to pharmaceuticals and consumer goods:
Royal London’s governed funds range offers ready-made options if an employee wants to move from the default fund.
There are nine available options for staff to choose from. But the best funds for them will depend on how close they are to their retirement and their attitude to risk. Fund managers will ensure the investments are balanced in line with these factors.
An alternative to the default fund is one of Royal London’s lifestyle strategies. But it depends on the level of risk the employee is prepared to take. Employers can also build their own personalised lifestyle strategies for their workforce.
If employees want more control over how their funds, they can move their savings to Royal London’s fund range.
Employees can pick their own investments from across 160 funds. 120 are external funds and 40 are internal. These are managed by fund managers, giving an employee more diversity in where their money is invested. This allows staff to cater their funds to their individual circumstances.
Once an employee starts making contributions, Royal London’s fund manager will oversee the investments. This aims to ensure they perform as expected and provide a good return for retirement.
If an employee has savings in another pension, they may be able to transfer some or all of it to their Royal London scheme. Royal London won’t charge to transfer funds, but the previous provider may charge an early exit fee.
It’s important to note that combining pensions won’t necessarily offer more money as the value of the funds can fluctuate. Members can also transfer from a Royal London workplace pension at no charge. Royal London may impose an early exit fee, though.
Employees cannot access their workplace pension until they are 55. Once they reach 55 years old, they can access their pension even if they are still working.
They can choose to either take it all as a cash lump sum, dip into it when they want to, or use it to buy a secure income. However, if an employee takes a portion or all of their savings before retirement, they will have less or even nothing left by the time they retire.
Employees have to nominate one or more beneficiaries who will get their savings if they pass away before their retirement. If the scheme trustees approve the request, the beneficiaries will get the employee’s money when the employee dies.
No, workplace pensions like Royal London’s are separate from the State Pension. Employers and employees both make contributions rather than it being paid for by taxpayers.
Employees can opt out of their workplace pension after automatic enrolment. They will have to give their employer a formal opt-out notice to confirm this decision. Employer contributions will stop, and so will the employees.
Any employee contributions already made will be refunded if they opt out within the first month of auto-enrolment. Employees can opt back into the scheme later on, provided they still meet the eligibility criteria.
If an employee leaves the company, the employer will stop making contributions to their pension. The employee can then:
Like with most pension plans, there are pros and cons to Royal London’s scheme to consider first.
As the UK’s largest mutual life, pensions and investments company, it has become an established, well-known and trusted brand. Royal London manages funds of over £130 billion, has 8.8 million policies, and over 4,000 employee members.
Royal London’s workplace pension offers a choice of bespoke and ready-made fund options. This means you can set up a scheme that suits the needs of your employees, as well as yours as an employer.
Employers can access an on-hand support team to help set up the scheme and ensure it runs smoothly.
Royal London provides an easy-to-use ‘Employer Online Dashboard’ to help you run your scheme. Within the dashboard are many useful tools and all the information you need to stay on top of your duties.
Staff will also have access to a pension platform where they can log in and review their savings. This allows them to prepare for retirement and improve financial wellbeing.
When it comes to transferring pensions, Royal London doesn’t charge for moving the scheme to them.
Unlike other providers, the charges of Royal London’s workplace pension are unclear for those who aren’t pension specialists.
Royal London will apply admin charges directly to the employee’s pension. This is to cover the costs of managing their pension and investing the savings. Royal London will decide and confirm these charges. So, it’s important to clarify what these are before setting up a workplace pension.
A transaction fee will also apply to the employee’s pension, which covers the costs of buying, selling and holding assets within Royal London’s funds.
When choosing a workplace pension, it’s important to compare providers as the options and fees will differ. The right one for your company will depend on your specific needs.
If you’re looking for a company pension for your team, you’ll find a range of options available. Each Workplace Pension provider will offer different funds, tax relief models, and employee criteria. So, to ensure you find the right scheme for your staff, it’s a good idea to compare your options to see which is the best fit. You can find out more in our guide to the best Workplace Pension providers.
There’s plenty to consider when choosing a Workplace Pension. Some schemes might be appealing at a glance, but might not be suitable for your employees or industry. It’s essential to figure out what your team and your business really needs before committing to a provider.
Adam Gibbs
Senior Consultant, Workplace Pensions
Choosing the right Workplace Pension for your employees is important to get right. After all, it will ensure that your team has the best chance to build up a good savings pot for their retirement.
We know that searching for a company pension scheme may feel daunting. But that’s where we can help. Our pension specialists can help you find the right Workplace Pension scheme for your company. We’ll do the heavy lifting, allowing you to run your business without the additional stress.
Get in touch by calling 02074425880 or emailing us at help@drewberry.co.uk.
Employee benefits can be a headache. But our specialists do this day-in, day-out, offering first class service when you need it most. Here’s why you should talk to us:
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