Blog
A deep-dive into a variety of pension topics to help you understand and learn more about your pension and the Scheme.
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18/6/2025
Editorial
<p>In general, as a member of the Industry-Wide Defined Contribution (IWDC) Section, the amount you and your employer pay in (contribute) depends on:</p><ul><li>Your Pensionable Pay </li><li>The contribution percentage rates set by your employer </li></ul><p>For example:</p><p><img alt="An example of IWDC contribution rates and what they are based on" src="https://cdn3.railpen.com/mp-sitefinity-prod/images/default-source/infographics-(current)/dc-contributions-table.png?sfvrsn=42fe4991_1"></p><div><div><div id="_com_1"><p><strong>You can find more information, including the definition of Pensionable Pay and your current contribution percentage rates, in your Key Features leaflet and Member Guide. </strong><strong>These are available in the 'My Library' area when you log into <a href="/login">your myRPS account</a>. </strong><br></p><p>You can also check with your employer to understand which part of your annual salary counts towards your Pensionable Pay and what your set contribution rates are. <br></p><p>You may be able to see your pension contribution amount on your payslips. <br></p><h4><strong>How your contributions are paid in: </strong><br></h4><p>Your pension contributions are taken from your gross pay, which is your pay before any income tax is taken from you.</p><p>You get tax relief on your contributions (up to certain limits), so this means that some of the money that would normally have gone to the government in tax, effectively goes towards your pension instead. <br></p><p>Many employers also operate a salary sacrifice arrangement for pension contributions, also known as SMART. Under this your National Insurance contributions go down, but your normal pension contributions don’t change. It means that:<br></p><ul type="disc"><li>your employer pays your pension contributions on your behalf</li><li>your contractual pay is adjusted to reflect this change</li><li>you and your employer pay National Insurance contributions on a lower salary </li><li>your take-home pay goes up, because you are paying lower National Insurance contributions<br></li></ul><p>If you’re unsure whether you pay your pension contributions via salary sacrifice, please check with your employer. </p><h4><strong>When your contributions change</strong></h4><p>The amounts that you and your employer pay in will change if your Pensionable Pay changes. They may also change at other times, for example as a result of:<br></p><ul type="disc"><li>a change in personal circumstances, such as taking statutory maternity, paternity or adoption leave</li><li>a change in working hours e.g. moving to part-time hours<br></li></ul><p>You can read more about this on the <a href="/iwdc-members/Im-still-working/changes-to-circumstances">‘change in circumstances’ page</a> and in your Member Guide. <br></p><p>Your employer may also change the contribution percentage rates in the future, but they would consult with you first. <br></p><h4><strong>What happens to your contributions</strong><br></h4><p>The money you and your employer pay into your pension pot is invested in a range of funds, with the aim of helping it grow over time. <br></p><p>The value of your pot when you decide to take it largely depends on:</p><ul type="square"><li>how much you and your employer have paid in. <a href="/iwdc-members/Im-still-working/my-payments"><strong>Visit the my payments page for details.</strong></a> </li><li>how long you have saved for</li><li>how well your chosen investment funds have performed (unless you have chosen a Lifestyle strategy) after any costs have been deducted. <a href="/iwdc-members/managing-investments/investing--the-basics-i-need-to-know"><strong>Visit the investing: the basics I need to know page for details.</strong></a></li><li><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; word-spacing: normal; caret-color: auto; white-space: inherit; font-size: inherit">any fees or deductions, </span> <a style="font-family: inherit; text-align: inherit; text-transform: inherit; word-spacing: normal; white-space: inherit; font-size: inherit" href="/iwdc-members/managing-investments/fund-choices"><strong>You can find details of any fees or charges that may be applied within the factsheets on the my fund choices page</strong></a><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; word-spacing: normal; caret-color: auto; white-space: inherit; font-size: inherit"></span></li></ul><p>That’s why it’s so important for you to fully understand your options and how saving in a Defined Contributions (DC) scheme works. <br></p><h4><strong>Ways of saving more</strong><br></h4><p>You can choose to pay in more to ‘top-up’ your pension pot if you wish. <a href="/iwdc-members/Im-still-working/saving-more">This is known as making Additional Voluntary Contributions (AVCs)</a>. <br></p><p>You can decide to make AVCs regularly, or as one-off payments, and it’s entirely up to you how much you want to contribute and where you want to invest them. Like your main IWDC pension contributions, AVCs are usually taken from your pay before any income tax, so you benefit from tax relief there too (up to certain limits). <br></p><p>AVCs are a great way to save particularly if you:<br></p><ul><li>have earnings, such as bonuses or overtime if they are not part of your Pensionable Pay</li><li>are thinking about taking your pension pot early</li><li>simply want to save a bit more towards your life after work<br></li></ul><p>If you are interested in paying AVCs please speak to your employer who will start the process for you.</p></div></div></div>
<p>In general, as a member of the Industry-Wide Defined Contribution (IWDC) Section, the amount you and your employer pay in (contribute) depends on:</p><ul><li>Your Pensionable Pay </li><li>The contribution percentage rates set by your employer </li></ul><p>For example:</p><p><img alt="An example of IWDC contribution rates and what they are based on" src="https://cdn3.railpen.com/mp-sitefinity-prod/images/default-source/infographics-(current)/dc-contributions-table.png?sfvrsn=42fe4991_1"></p><div><div><div id="_com_1"><p><strong>You can find more information, including the definition of Pensionable Pay and your current contribution percentage rates, in your Key Features leaflet and Member Guide. </strong><strong>These are available in the 'My Library' area when you log into <a href="/login">your myRPS account</a>. </strong><br></p><p>You can also check with your employer to understand which part of your annual salary counts towards your Pensionable Pay and what your set contribution rates are. <br></p><p>You may be able to see your pension contribution amount on your payslips. <br></p><h4><strong>How your contributions are paid in: </strong><br></h4><p>Your pension contributions are taken from your gross pay, which is your pay before any income tax is taken from you.</p><p>You get tax relief on your contributions (up to certain limits), so this means that some of the money that would normally have gone to the government in tax, effectively goes towards your pension instead. <br></p><p>Many employers also operate a salary sacrifice arrangement for pension contributions, also known as SMART. Under this your National Insurance contributions go down, but your normal pension contributions don’t change. It means that:<br></p><ul type="disc"><li>your employer pays your pension contributions on your behalf</li><li>your contractual pay is adjusted to reflect this change</li><li>you and your employer pay National Insurance contributions on a lower salary </li><li>your take-home pay goes up, because you are paying lower National Insurance contributions<br></li></ul><p>If you’re unsure whether you pay your pension contributions via salary sacrifice, please check with your employer. </p><h4><strong>When your contributions change</strong></h4><p>The amounts that you and your employer pay in will change if your Pensionable Pay changes. They may also change at other times, for example as a result of:<br></p><ul type="disc"><li>a change in personal circumstances, such as taking statutory maternity, paternity or adoption leave</li><li>a change in working hours e.g. moving to part-time hours<br></li></ul><p>You can read more about this on the <a href="/iwdc-members/Im-still-working/changes-to-circumstances">‘change in circumstances’ page</a> and in your Member Guide. <br></p><p>Your employer may also change the contribution percentage rates in the future, but they would consult with you first. <br></p><h4><strong>What happens to your contributions</strong><br></h4><p>The money you and your employer pay into your pension pot is invested in a range of funds, with the aim of helping it grow over time. <br></p><p>The value of your pot when you decide to take it largely depends on:</p><ul type="square"><li>how much you and your employer have paid in. <a href="/iwdc-members/Im-still-working/my-payments"><strong>Visit the my payments page for details.</strong></a> </li><li>how long you have saved for</li><li>how well your chosen investment funds have performed (unless you have chosen a Lifestyle strategy) after any costs have been deducted. <a href="/iwdc-members/managing-investments/investing--the-basics-i-need-to-know"><strong>Visit the investing: the basics I need to know page for details.</strong></a></li><li><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; word-spacing: normal; caret-color: auto; white-space: inherit; font-size: inherit">any fees or deductions, </span> <a style="font-family: inherit; text-align: inherit; text-transform: inherit; word-spacing: normal; white-space: inherit; font-size: inherit" href="/iwdc-members/managing-investments/fund-choices"><strong>You can find details of any fees or charges that may be applied within the factsheets on the my fund choices page</strong></a><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; word-spacing: normal; caret-color: auto; white-space: inherit; font-size: inherit"></span></li></ul><p>That’s why it’s so important for you to fully understand your options and how saving in a Defined Contributions (DC) scheme works. <br></p><h4><strong>Ways of saving more</strong><br></h4><p>You can choose to pay in more to ‘top-up’ your pension pot if you wish. <a href="/iwdc-members/Im-still-working/saving-more">This is known as making Additional Voluntary Contributions (AVCs)</a>. <br></p><p>You can decide to make AVCs regularly, or as one-off payments, and it’s entirely up to you how much you want to contribute and where you want to invest them. Like your main IWDC pension contributions, AVCs are usually taken from your pay before any income tax, so you benefit from tax relief there too (up to certain limits). <br></p><p>AVCs are a great way to save particularly if you:<br></p><ul><li>have earnings, such as bonuses or overtime if they are not part of your Pensionable Pay</li><li>are thinking about taking your pension pot early</li><li>simply want to save a bit more towards your life after work<br></li></ul><p>If you are interested in paying AVCs please speak to your employer who will start the process for you.</p></div></div></div>
Blog
Understanding your IWDC contributions
Do you know what gets paid into your pension pot?
In general, as a member of the Industry-Wide Defined Contribution (IWDC) Section, the amount you and your employer pay in (contribute) depends on:
- Your Pensionable Pay
- The contribution percentage rates set by your employer
For example:
/dc-contributions-table.png?sfvrsn=42fe4991_1)
You can find more information, including the definition of Pensionable Pay and your current contribution percentage rates, in your Key Features leaflet and Member Guide. These are available in the 'My Library' area when you log into your myRPS account.
You can also check with your employer to understand which part of your annual salary counts towards your Pensionable Pay and what your set contribution rates are.
You may be able to see your pension contribution amount on your payslips.
How your contributions are paid in:
Your pension contributions are taken from your gross pay, which is your pay before any income tax is taken from you.
You get tax relief on your contributions (up to certain limits), so this means that some of the money that would normally have gone to the government in tax, effectively goes towards your pension instead.
Many employers also operate a salary sacrifice arrangement for pension contributions, also known as SMART. Under this your National Insurance contributions go down, but your normal pension contributions don’t change. It means that:
- your employer pays your pension contributions on your behalf
- your contractual pay is adjusted to reflect this change
- you and your employer pay National Insurance contributions on a lower salary
- your take-home pay goes up, because you are paying lower National Insurance contributions
If you’re unsure whether you pay your pension contributions via salary sacrifice, please check with your employer.
When your contributions change
The amounts that you and your employer pay in will change if your Pensionable Pay changes. They may also change at other times, for example as a result of:
- a change in personal circumstances, such as taking statutory maternity, paternity or adoption leave
- a change in working hours e.g. moving to part-time hours
You can read more about this on the ‘change in circumstances’ page and in your Member Guide.
Your employer may also change the contribution percentage rates in the future, but they would consult with you first.
What happens to your contributions
The money you and your employer pay into your pension pot is invested in a range of funds, with the aim of helping it grow over time.
The value of your pot when you decide to take it largely depends on:
- how much you and your employer have paid in. Visit the my payments page for details.
- how long you have saved for
- how well your chosen investment funds have performed (unless you have chosen a Lifestyle strategy) after any costs have been deducted. Visit the investing: the basics I need to know page for details.
- any fees or deductions, You can find details of any fees or charges that may be applied within the factsheets on the my fund choices page
That’s why it’s so important for you to fully understand your options and how saving in a Defined Contributions (DC) scheme works.
Ways of saving more
You can choose to pay in more to ‘top-up’ your pension pot if you wish. This is known as making Additional Voluntary Contributions (AVCs).
You can decide to make AVCs regularly, or as one-off payments, and it’s entirely up to you how much you want to contribute and where you want to invest them. Like your main IWDC pension contributions, AVCs are usually taken from your pay before any income tax, so you benefit from tax relief there too (up to certain limits).
AVCs are a great way to save particularly if you:
- have earnings, such as bonuses or overtime if they are not part of your Pensionable Pay
- are thinking about taking your pension pot early
- simply want to save a bit more towards your life after work
If you are interested in paying AVCs please speak to your employer who will start the process for you.
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