Pensions in payment

You may have some questions about what happens after you have retired and you are in receipt of your pension.

How will my pension be paid?

It will be paid into a UK bank or building society on the 21st of each month providing payments can be made via the BACS system (this is an automated credit transfer system used to transfer all USS monthly pension payments). If the 21st date falls on a weekend or bank holiday you will be paid on the working day prior to the 21st.

How often will I receive a payslip?

A payslip is always produced in April each year but thereafter payslips are only produced when your net monthly pension differs by £1 or more to that paid in the previous month. This can occur if the government makes changes to tax bands or when an amendment to your tax coding is processed through the payroll.

How long will it be paid for?

It will be paid for the rest of your life.

Will my pension increase?

Yes it will. Your main section pension is reviewed annually. The increases are linked to increases in official pensions paid to public sector employees like teachers, civil servants or NHS employees. USS will match increases in official pensions for the first 5%, if official pensions increase by more than 5% then USS will pay half of the difference up to a maximum increase of 10%. So, if official pensions increased by 15% USS increases would be 10%.

The amount of the official increase is contained in an annual Pensions Increase Review Order along with details of the proportionate amount to be paid depending on the date the pension began. This increase applies to pensions for surviving spouses, dependants and eligible children.

Pensions from the supplementary section of USS in respect of retirement on the grounds of total incapacity or death in service are increased regularly where funds permit. So far these increases have always been in line with increases to the main section of USS but there is no guarantee that future increases will be made on this basis.

Please note:
During any periods of deflation, or negative inflation, we will not reduce the value of your pension, but your pension may not increase.

You will be notified in writing of any increase applicable to your pension. Notifications are distributed before annual increases are processed in April each year. More information can be found in the retirement benefits booklet.

Pensions Increases for the Last 5 Years

 Year Pre 1 October 2011 benefits   Post 1 October 2011 benefits 
 2020  1.7%  1.7%
 2019  2.4%  2.4%
 2018  3.0%  3.0%
 2017  1.0%  1.0%
 2016  0%  0%

What will my dependants receive when I die?

At USS’s discretion and depending on your circumstances and age at death, your benefits may include:

  • a pension for life for your spouse/civil partner or dependant partner (regardless of sex) and
  • if you have eligible children they may also qualify for USS benefits.

The spouse’s/civil partner’s pension is 50% of the standard pension calculated when you retired, plus pension increases from retirement to your death.

Any choices you made about how much cash and pension you took at retirement therefore have no effect on the value of the spouse’s/civil partner’s pension.

You should complete some nomination forms so that in the event of your death USS will have your instructions for where any monies are to be paid. Complete the Expression of wish form for any lump sum payable.

If you are neither married, nor part of a civil partnership, complete the Registration of potential dependant form. You complete this form to register a financial dependant to receive the equivalent of the spouse’s/civil partner’s pension if you are not married nor part of a registered civil partnership.

Where do I go with queries?

You can contact USS with your query either by emailing, telephoning or writing. Details of how to contact us are on the contact us page.

Any queries regarding the calculation of your tax code should be addressed to:

Pay As You Earn and Self Assessment
HM Revenue & Customs

Telephone number: 0300 200 3300
Telephone number (Overseas): 00 44 135 535 9022

Please quote tax office reference 428/U168 together with your National Insurance number.

How do I notify changes in my details?

It is very important that you notify USS of any changes to your surname, personal details, bank or address. There is a change of details form available which you can complete and sign before sending it to USS.

Alternatively, please confirm any change to your details to us by letter at the address shown on the contact us page. Note that in order for us to update your name we require sight of documentary evidence confirming the change, such as a certified copy of your Change of Name Deed. Please ensure your pension number or National Insurance number is shown and your letter is signed. We recommend that you leave your existing bank account open until you receive written confirmation from us that we have amended our records.

Your address can also be updated over the telephone by contacting Pensions Payroll directly on 0151 556 0747.

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COVID-19: During the current situation when many people are unable to leave their homes please contact the Pensions Payroll team on the telephone number above should you wish to notify us of any change to your details.

How will income tax be applied to my pension?

Usually your employer will give you part 1A of form P45 (which you should retain for your own records) and will send parts 2 & 3 direct to USS.

If however you receive parts 2 & 3 as well please forward these to our Pensions Payroll section. The tax code from your P45 has to be applied on a "month 1 basis" until HM Revenue & Customs (HMRC) instruct us to amend your tax code.

In the absence of a P45 we are instructed by HMRC to apply income tax using the emergency tax code until they are able to issue the correct tax code.

How will my pension be paid if I move abroad?

Should you move abroad all your USS benefits would remain unchanged.

However, as we process all monthly pension payments via the Banker's Automated Clearing Service (BACS), it will be necessary for you to maintain a United Kingdom bank or building society account into which your monthly pension can be credited.

Alternatively, you may wish to consider using a service operated by Citibank called Worldlink Payment Services which is designed to deliver regular payments direct to overseas bank accounts. If you wish to consider this option, we would pay your pension via BACS to a unique Citibank account and they would then transfer your pension payment to your overseas bank account.

We are advised that the benefits of this service are:

  • there is no need to retain a UK bank or building society account.
  • direct credit to a personal account in local currency.
  • speedier transfer of funds.
  • competitive exchange rates.
  • the cost you will incur in utilising this service is £1.00 per transaction for countries where payments can be made in the local currency via an automated clearing house (ACH) system (in the UK this is the BACS system). If payments cannot be paid in this way then a £20.00 transaction charge would apply.

Should you wish to change to this payment method please write to our pensions payroll section and we will send you the bank mandate form that will need to be completed.

How will my pension be taxed if I move abroad?

Your gross pension is subject to PAYE income tax unless you personally apply to HM Revenue & Customs (HMRC) for exemption on the grounds that you are non-resident.

Should you wish to apply for exemption, please contact HMRC for advice on the telephone number listed above. They will be able to confirm the correct form(s) you need to complete for your specific country of residence.

If exemption is granted, HMRC will provide Universities Superannuation Scheme Ltd with the appropriate written authorisation to amend your tax coding. Thereafter your pension payments will be made without deduction of UK income tax.

Please note that it is not unusual for completion of the exemption procedure to take up to eight months. Any overpayment of income tax, however, will eventually be refunded to you in one of the following ways:

  • through the payroll (subject to receipt of HMRC authorisation); or
  • directly to you by HMRC. (contact details list above)

Overseas existence checks

From time to time USS will write to pensioners living overseas. As trustees we have a duty to ensure that pensions paid by USS are actually being received by the pensioner entitled to the pension.

A relative CANNOT be a witness.

What if I do not recognise the bank sort code and account number quoted in the details?

If you use/or have been transferred to Citibank’s Worldlink Payment Services to remit payments to your overseas bank account the details shown are the Citibank’ bank details we use to make the initial transfer of your pension payment to Citibank who will then send it to your overseas bank account. In these cases the payment reference will show your Citibank reference.

Cabinet Office's National Fraud Initiative

In accordance with the Data Protection Act 1998, Universities Superannuation Scheme Ltd (USS) is required to inform you that, along with other organisations, it participates in the Cabinet Office's National Fraud Initiative exercises. This involves USS disclosing data held about pensioners to the Cabinet Office, so that it can be checked against other public records, for the purpose of preventing and detecting fraud. This initiative checks the data we hold against registered deaths to identify cases where pensions are still being paid despite the pensioner’s death. This data matching exercise meets the requirements of the data protection law. The Cabinet Office will be processing the data for this purpose only and will comply with the data protection principles.

This exercise not only identifies pensioners who have died and USS has not been informed, it also assists in the identification of potential beneficiaries following the death of a deferred member. This will not affect members who are currently contributing to the scheme and is for information purposes only. You do not need to take any action. Further information about how USS processes data can be found in the privacy policy.