The People’s Pension is run by People’s Partnership: a not-for-profit organisation. Founded in 1942, it started with a holiday savings scheme for the construction industry, and went on to deliver products that were simple to implement, beneficial for workers, and hassle-free for employers.
The People’s Pension is recognised as the UK’s largest independent commercial master trust scheme, serving over 7 million members across some 100,000+ employers.
Its not-for-profit model (profits reinvested for members) and awards for responsible investment stewardship make it an appealing choice for employers looking to deliver value and sustainability in their pension proposition.
As a master trust, it’s used by multiple employers at the same time. The governance, trustees and regulatory responsibility are all centralised. Due to this, costs can reduce and the process of setting up a Workplace Pension is easier for employers.
The People’s Pension Key Facts | |
|---|---|
✅ | Defaqto rating: 5⭐ |
✅ | Type of scheme: Master trust |
✅ | Suitable for: Smaller businesses |
✅ | Funds available: 8, with 3 investment profiles |
✅ | Financial strength: No published rating |
✅ | Tax relief method: Relief at Source by default, can switch to Net Pay |
✅ | Employee charges: AMC 0.50% + small flat fee |
✅ | Employee charges: AMC 0.50% + small flat fee |
✅ | Employer fees: Set-up fee £300–£500+ VAT (lower if using an adviser) |
✅ | Ethical funds: 1 true ethical fund, others with ESG tilt |
While The People’s Pension is open to employers of all sizes, smaller businesses may find it more beneficial.
To be eligible for automatic enrolment, employees must:
Non-eligible employees can still ask their employer if they can join the scheme.
It can be used by multiple employers, which is why it’s known as a master trust or multi-employer pension scheme.
It’s a defined contribution pension for employers and employees to pay into. Contributions are a percentage of the employee’s qualifying earnings.
The People’s Pension has two sign-up options depending on the employer’s payment needs:
Contributions are managed on behalf of the employee by the independent trustees. While the trustees will make all the major decisions, employers can decide on:
Your staff will pay contributions to their pension, along with you as their employer. The government will also make a contribution in the form of tax relief.
It’s important to note that the employee and employer must pay the minimum contributions set out by law. But if either party wants to increase their contributions, they are free to do this.
Most people who join The People’s Pension do so after being automatically-enrolled by their employer. They can also join if they’ve received a share of their ex-partner’s pension fund via a divorce settlement.
IMPORTANT NOTICE 🧐
Unlike other providers, The People’s Pension is not available to self-employed individuals to meet their own pension requirements.
Employees pay an annual management charge of AMC 0.50% plus a small flat fee. Employers pay a setup fee of £300–£500+ VAT, but this is lower if going through an adviser (like us).
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
The following contribution amounts were put in place by the government. By law, employers and employees must pay a minimum.
Employers must contribute at least 3% of an employee’s salary to their pension.
It’s down to the employer whether they make contributions above 3%. Some offer higher contributions as part of a corporate employee benefits package.
The least an employee must contribute is 5% of their qualifying earnings. But the employee can contribute more if they wish.
The highest possible contribution depends on the limits set by the employer or their annual allowance, whichever is lower.
Qualifying earnings are an employee’s income before tax and National Insurance deductions. This includes:
Employees will get 1% tax relief from the government on top of their contributions.
There are eight investment funds to choose from. When first enrolled in the scheme, pension contributions automatically go into the default ‘balanced’ fund with a low level of risk.
The People’s Pension offers various investment choices with a mixture of shares, bonds, and gilts. An employee’s money is invested across the different funds based on their choice, and how near they are to retirement.
For proactive investors, there are eight funds they can choose from:
Each type of pension fund has a different degree of risk. Employees can move their pension savings into a fund that best suits their risk preference. They can also choose how much of their pension savings to put in each fund. There are three investment profiles to choose from: Balanced, Cautious, or Adventurous.
Once an employee contributes to a People’s Pension investment fund, it is managed by the schemes board of trustees. The trustees are responsible for investing the savings and making decisions that will have the best impact on returns.
The trustees delegate the day-to-day management of investments to professional investment managers who have extensive experience in the investment market.
An employee can access their fund when they turn 55 years old. Once they reach their 55th birthday, they can withdraw 25% of their savings as a tax-free lump sum.
They can also choose to leave the savings in the pot if they prefer to have more available later.
Employees can transfer other pensions they have to The People’s Pension on their online account. The good news? There’s no charge for doing so.
Employees can also transfer out of The People’s Pension plan. This is as long as the new pension provider accepts transfers and has the appropriate HMRC scheme reference.
When an employee leaves their job, they should be marked as having left employment. The employer will no longer make contributions to that employee’s pension pot. The employee can continue to contribute privately to their People’s Pension fund after leaving, though.
No. It is separate from the state pension. State pensions are provided by the government once you reach retirement age and are funded by taxpayers, instead of employees and their employers.
Yes, after an employee has been enrolled in The People’s Pension, they can leave at any time if they wish. If they opt out, they will miss out on the extra free money their employer and the government put towards their pot.
When an employee joins the scheme, they will nominate a beneficiary whom they’d like to receive their pension if they were to die. The People’s Pension trustee will then consider the employee’s wishes after they’ve gone.
When you choose a Workplace Pension scheme for your employees, there are several factors to consider. A good place to start is by reviewing its advantages and disadvantages.
Unlike other defined contribution schemes, employees won’t have to pay a contribution charge on their savings.
Employees can pick from one of the three lifestyle risk profiles that best suits them: cautious, balanced, and adventurous. They also have the option to move between funds up to twice a year at no charge.
An employee can continue contributing to The People’s Pension scheme even after they’ve left their current job.
The People’s Pension offers useful tools to help employers communicate with their employees about the scheme. An assessment template enables employers to assess their workforce and upload employee details each pay period.
Unlike other pensions, The People’s Pension charges employers a one-off fee for setting up the scheme. But employers can reduce this by using an adviser.
There is an annual management charge for employees to pay in this scheme. When picking a Workplace Pension scheme, it’s important to compare providers as options and fees vary.
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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