How Does thepeoplespension.co.uk Work?

Thepeoplespension.co.uk operates as a master trust pension scheme, primarily serving as a workplace pension provider for employers in the UK. Its core function is to facilitate the automatic enrolment of employees into a pension scheme, manage their contributions, invest these funds, and ultimately provide members with access to their savings in retirement. The process is designed to be straightforward for both employers and employees. Employers select The People’s Pension to fulfil their auto-enrolment obligations, set up the scheme, and manage employee contributions. For employees, once enrolled, they gain access to an online account to monitor their pension, make investment choices, and manage their savings. The platform prides itself on simplicity, transparency, and offering various investment profiles to suit different risk appetites.

Understanding Auto-Enrolment

The foundation of how The People’s Pension primarily works for most individuals is through the UK’s auto-enrolment regulations.

• Employer Obligation: Since 2012, UK employers have a legal duty to automatically enrol eligible staff into a workplace pension scheme. The People’s Pension is a common choice for many employers to meet this obligation.
• Automatic Enrolment Process: When an employer uses The People’s Pension, eligible employees are automatically enrolled. This means contributions are taken directly from their salary, often with contributions from the employer and tax relief from the government.
• Opt-Out Option: While auto-enrolled, employees have the right to opt out of the scheme, though this is generally discouraged due to the benefits of employer contributions and tax relief. The website does have information related to thepeoplespension.co.uk/opt-out/.
• Onboarding for New Employees: As new employees join a company using The People’s Pension, they will typically be enrolled after a certain period of employment, as per auto-enrolment rules.
• Simplified Compliance for Employers: The service streamlines the complex compliance requirements of auto-enrolment for businesses, handling the administrative burden of setting up and running a pension scheme.

Investment Strategy and Options

The People’s Pension manages vast sums of money, and its investment strategy is a critical component of how it works to grow members’ savings.

• Diversified Investments: Funds are invested across a range of asset classes, which typically include equities, bonds, property, and other investments, to achieve long-term growth and manage risk.
• Default Investment Approach: For members who don’t choose, there’s often a default investment strategy, usually a diversified, balanced fund that aims for steady growth while managing volatility.
• Member Choice of Investment Profiles: The website highlights “Straightforward investment options” with ‘balanced,’ ‘cautious,’ or ‘adventurous’ profiles. This allows members to select a profile that aligns with their personal risk tolerance and financial goals.
• Active Management: While the exact details of the investment management style (passive vs. active) aren’t overtly detailed on the homepage, the reference to navigating “uncertain and volatile times” suggests a degree of active oversight in their strategy.
• Ethical Investing Considerations: While not explicitly stating Sharia-compliant funds, some pension providers offer ethical or ESG (Environmental, Social, Governance) options. Users would need to delve deeper into their investment options to determine if any align with specific ethical criteria beyond what’s presented on the homepage.

Member Account Management and Features

For members, the online account is the central hub for interacting with their pension. This is where the promises of “Effortless management” and “Complete transparency” are meant to be delivered.

• Online Account Access: Members can activate and log in to their account at thepeoplespension.co.uk/your-online-account/ to view their pension details, including contributions, fund value, and investment performance.
• Combining Pensions: A key feature highlighted is the ability to “Combine your pensions” at thepeoplespension.co.uk/pension-transfer/, allowing members to consolidate multiple old pension pots into one, simplifying management and potentially reducing fees.
• Financial Wellbeing Tools (Nudge): The integration with “nudge” (accessible via thepeoplespension.co.uk/support-for-pension-scheme-members/financial-wellbeing/) provides personalised tools and guidance to help members improve their financial literacy and reach broader financial goals, extending beyond just their pension.
• Mobile App Functionality: The availability of “The People’s Pension app” (thepeoplespension.co.uk/app/) enables members to “Manage your pension on the move,” providing real-time access and management capabilities from their smartphones.
• Accessing Savings in Retirement: For those nearing retirement, the platform offers guidance on “Accessing your pension money” through resources like their “Retirement planning guide” (thepeoplespension.co.uk/retirement/retirement-planning/get-ready-for-retirement/), outlining various options and considerations for drawing down funds.