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For employers: For investment documents relating to the SIP consultation visit our investment documents page.

Your pension is changing

Find out what these changes mean to you if you earn above £41,004 but below £70,296

Your Statutory Notice of changes to USS

The way you build up benefits in the Retirement Income Builder, the defined benefit (DB) part of USS, and savings in the Investment Builder, the defined contribution (DC) part, is changing from 1 April 2024.

The changes follow recommendations from the Joint Negotiating Committee (JNC) and the statutory employer consultation with affected members and representatives on the proposed changes. The JNC’s recommendations have been approved by the trustee board. It’s important you understand how they’ll affect your USS pension in the future.

Here we’ll cover the key changes for you, other changes and what you need to do next.

  • The key changes for you

    1. Salary threshold change

    The salary threshold will increase from £41,004 to £70,296. This means your normal contributions will now build more guaranteed income (defined benefits) in the Retirement Income Builder and no longer any defined contribution savings in the Investment Builder.

    This salary threshold will be increased annually until 31 March 2028 in line with increases to official pensions, which broadly go up with CPI inflation, subject to certain limits. Currently this is limited to a maximum increase of 2.5% a year but from 1 April 2024 the £70,296 figure will rise in future years by a maximum of 10% (see the explanation of pension increases for how this will apply).

    For a refresher on how the DB and DC parts of USS work, see how your pension works.

    2. A higher accrual rate for your defined benefit pension

    The rate at which you build defined benefits in the Retirement Income Builder will increase.

    Currently you build 1/85 of your salary (up to the salary threshold) in defined benefit (DB) pension each year and 3/85 of your salary as a lump sum on retirement. This will increase for each year from 1 April 2024 to 1/75 of your salary for pension benefits and 3/75 of your salary for the lump sum, respectively.

    Watch our video to see a reminder on how you build benefits in the Retirement Income Builder.

  • Other changes

    1. Remember you’re already paying less too

    Since 1 January 2024, your member contributions have reduced from 9.8% of salary to 6.1%. Your employer’s contribution rate has also reduced from 21.6% to 14.5%. This does not affect the level of pension you build up.

    See how much you now pay by using our Contributions & Tax Calculator in My USS.

    2. Benefit uplift

    This April you’ll receive a one-off uplift to your Retirement Income Builder (DB) benefits. This uplift will give you an extra £215 annual pension in retirement and an associated £645 lump sum. Like your existing Retirement Income Builder benefits, it will be subject to USS standard pension increases.

    3. Higher cap for future pension increases

    The benefits that you have built up in the Retirement Income Builder increase every year both before and after you retire in line with increases to official pensions which currently go up with CPI inflation. This provides a level of inflation protection for your benefits.

    The annual increase for benefits built up from 1 April 2022 was to be subject to a maximum increase of 2.5% (coming into effect for increases from 1 April 2026). The changes mean these benefits will now be subject to a higher maximum increase of 10% rather than 2.5%. Increases will be as follows:

    • Where inflation (currently CPI) is 5% or less, the increase will be matched.
    • Where inflation is more than 5% but less than 15%, the increase will be 5% plus half of the percentage increase over 5%.
    • Where inflation is 15% or more, the increase applied will be 10%.
  • What's not changing?

    There are no changes to Normal Pension Age. You’ll also still receive life cover and other benefits for loved ones and will still be entitled to ill health cover. Benefits built up before 1 April 2022 will remain unchanged. Benefits built up between 1 April 2022 and 1 April 2024 will be increased by the benefit uplift detailed above and the ongoing higher cap on pension increases.

    Retirement Income Builder benefits already built up are guaranteed and protected by law. Investment Builder savings remain invested and could go up or down in value depending on how investments perform.