The Pearson Pension Plan

This page provides an introduction into the options available to invest and save your money, together with a list of useful links to get you started. However, it is important to note that the pensions team is unable to provide any financial advice and would recommend you seek professional advice if necessary.

We have partnered with WEALTH at work to provide a programme of webinars covering a range of topics from pension basics to understanding tax and planning for retirement, as well as wider financial issues. The webinars vary in length, and all have the opportunity for you to ask questions. You will receive an email from the Plan if you are eligible to attend.

Options for saving

If you are looking to make the most of your savings there are many options available to you. It is important to be well informed and consider professional financial advice.

Saving options include:

• Pension options

  Your pension is a great way to grow your savings over time, and you might be able to save a lot more than you think.

  In the UK there are several types of pensions available. These range from the schemes set up and run by an employer to personal pensions. The pension basics section on the Information Centre has in depth explanation of the types of pensions available to you, a link is included at the bottom of the page.

  Pay less and save more into your pension by switching to the Money Purchase 2003 (MP03) Section.

  If you are a current employee of Pearson, you will have the option of joining one of two Defined Contribution (DC) sections; the Auto-Enrolment (AE) Section and MP03 Section. If you do not apply to join either, eligible employees will be automatically enrolled into the AE Section. If you are enrolled into the AE Section, you can switch to the MP03 Section, where Pearson will double your contribution.

  Member contributions to the Auto-Enrolment (AE) Section are fixed at 5% of qualifying earnings, with Pearson paying 3% each month.

  The minimum member contribution to the MP03 Section is 3% of pensionable salary, with Pearson paying double.

  To show the difference in these contribution amount, here is an example:

  If your contribution to the MP03 Section is £100 a month, Pearson’s contribution is £200, so the total paid into your pension pot in one year is £3,600.00. Whereas the same contribution for an AE member would only result in an annual contribution of £1,920.00.

  You can also save on national insurance if your pension contributions are made using salary exchange.

• Instant access accounts

  This is an option if you want to deposit your savings in an account that will not restrict your access to the funds. It is a great option to consider for an emergency fund, as you can access it freely. The drawback is that they tend to offer lower interest rates.

• Individual Savings Account (ISA)

  An ISA is investment account available in the UK that offers tax-efficient savings. It allow you to invest or save up to £20,000 each year. The interest earnt on the ISA is tax free.  If you would like more information on tax, please click on the link below to the dedicated page on the Information Centre.

  There are a few different types of ISAs, including Cash, Junior, and Lifetime ISAs. The link to MoneyHelper’s guide to tax-efficient ways to save or invest is at the bottom of this page.

• Premium Bonds

  Premium Bonds provide a chance to win tax-free prizes. Each bond has the chance to win but there is no guarantee. The MoneyHelper guide to Premium Bonds, below, explains how they work, how to get started, and contains a list of pros and cons.

Where to go for information on savings and investing

There is a lot to consider when looking to invest. We would recommend seeking financial advice to have a greater understanding of the risk and return associated with investing and to discuss the options suitable for you.

MoneyHelper has a beginner’s guide to investing. This guide outlines the different types of investments when you should consider investing and information on whether to save or invest. The link to this page is included below.

• Creating a budget and setting up an emergency fund

  Keeping track of your monthly expenditure can help you to reach your savings goals. If you can, it is also useful to add a regular emergency fund payment into your budget as a long-term savings target to help you if the unexpected happens.

  You can read more about budgeting on our dedicated budgeting page using the link below.