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Make the most of your USS pension

Since you may be new to the Investment Builder, check out how the defined contribution (DC) part of USS works and how it stacks up against other DC pension schemes

How your pension works

USS provides hybrid benefits – it has defined benefit (DB) and defined contribution (DC) parts. You’re building up benefits and savings in both parts.

You build a guaranteed income for life in retirement in the Retirement Income Builder, the DB part, which everyone joins when they become a member – you build up benefits based on your salary up to the salary threshold.

And, you might also be building savings in the Investment Builder, the DC part of USS. All members can build an Investment Builder pot. If you earn above the salary threshold, you’ll start saving in to the Investment Builder automatically or you can do this by making additional contributions or by transferring other pensions you might have in other registered or recognised overseas pension schemes into USS.

Check out what sets the Investment Builder apart from other DC pensions and how you might make the most of it.

  • The Investment Builder

    Flexibility to take your savings before or after you retire, underpinned by a guaranteed for life defined benefit pension with the Retirement Income Builder.


    Salary sacrifice – if your employer offers it, you can save on your National Insurance contributions, meaning your contributions cost you less.


    No member admin/management fees on funds arising from normal/additional contributions to the Investment Builder as these fees are covered by the scheme subsidy.


    No member investment fees for contributions on funds arising from normal/additional contributions to the Investment Builder as these fees are covered by the scheme subsidy .


    If you transfer a pension from a registered or recognised overseas pension scheme to the Investment Builder the only thing you’ll pay for is the investment fees which range from 0.1% - 0.3%


    You have the option of ethical investments that automatically manage your investment risk as you approach retirement.


    The Investment Builder invests in Private Markets which can offer potential greater returns, better diversification, and more inflation protection.


    Great tax benefits when you take your savings. Tax allowances are based on your overall USS pension, which means you may be able to take more than 25% of your Investment Builder as a tax-free lump sum.

  • Personal DC pensions/other workplace DC schemes

    DC schemes can offer the same flexible ways to access your cash, but very few are part of a hybrid scheme which offers DB benefits as well that also gives you a guaranteed income for life, so you can use your DC savings to boost your retirement income or for something else.


    There isn’t the option for USS employers to make salary sacrifice contributions to other savings vehicles or private pensions.


    The average annual admin and investment management charges for a DC pension in the UK is 1.09%*


    Typical investment fees can range from 0.1% to 1%**.


    Typical investment fees in personal and many other workplace DC pension schemes can range from 0.1% to 1% plus any annual management charge as per above.


    Most DC pension schemes don’t offer ethical investments where they automatically manage your investment risk, instead you need to manage moving your investments yourself.


    Most DC pension schemes don’t offer investments in Private Markets.


    You can generally take up to 25% of all pensions as a tax-free lump sum, but to get the same amount you might need to reduce your annual pension with USS .

  • Next steps

    So, the Investment Builder packs a punch, and there are some things that you should do to make the most of it. You can also see how it works alongside the Retirement Income Builder to give you the best of both worlds.

*According to pension adviser Profile Pensions. In 2015, the government set a cap of 0.75% for the annual charge on the default investment choices for defined contribution workplace pensions used for automatic enrolment. However, this doesn’t apply to other investment options or older schemes.

**The Times money mentor


Published: 28 June 2022

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