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Get under the hood of your USS pension

It’s important to know what you get from your USS pension so you can plan for your future, so here’s a quick reminder

Understanding your pension

A guaranteed income for life when you retire – The Retirement Income Builder (DB)

When you started contributing to USS, you automatically joined the Retirement Income Builder – the defined benefit (DB) part of USS – which gives you a guaranteed income for life and a tax-free lump sum (up to HMRC limits) when you retire.

According to the Pension Regulator’s (TPR’s) Occupational defined benefit (DB) landscape in the UK 2023 report, there are only 199 DB workplace schemes open to new members, compared to 25,800 Defined Contribution workplace pensions, as reported in TPR’s Occupational defined contribution landscape in the UK 2023 report. This means your USS pension and the guaranteed benefits it gives you are rare.

Every year you build a block of pension based on an accrual rate (1/75 of your salary, up to the salary threshold). The pension you build up is banked and increased in line with inflation (subject to certain caps), giving you an element of inflation protection.

The Retirement Income Builder can stay with you throughout your career in higher education. If you change jobs to another USS eligible employer, you can continue building your USS pension, instead of having to start building in a new scheme, like many pension scheme members who move jobs. The benefits you build up in your new role will be linked to the ones you’ve built up already.

You can estimate what you might get in retirement by logging into My USS and using the Benefit Calculator.

Life and ill health cover

As long as you’re paying in to USS, you get life cover to help take care of your loved ones once you’re gone. They may be able to get a lump sum of three times your salary and a pension too.

If you have to stop working because of ill health which stops you from working or reduces your capacity to work, as long as you’ve been building your pension with us for at least two years, you could retire early with full USS benefits.

The option to boost your savings pot

USS is a hybrid scheme, which means we also have a defined contribution (DC) part: the Investment Builder. You’re not currently paying into this as you earn below the salary threshold, but you can choose to make additional contributions in My USS to save a bit more towards your future or transfer other pensions you may have to the Investment Builder.

To estimate the impact of saving a bit more in the Investment Builder could have, use the Benefit Calculator in My USS.

Next steps

Published: 25 June 2024