CHOOSE YOUR SCHEME

Welcome to the new look website, for members of a Lloyds Banking Group pension scheme.

If you joined the Group after 1 July 2010, you'll be a member of Your Tomorrow.

NOT YET A MEMBER?

If you’re an employee of Lloyds Banking Group and not a member of one of our pension schemes, it’s not too late to join, as long as you’re eligible.

IF YOU JOINED THE GROUP ON OR AFTER 1 JULY 2010

You’ll be automatically enrolled in Your Tomorrow on the day you join the Group. If you’re not yet a member, see joining.

IF YOU JOINED THE GROUP BEFORE 1 JULY 2010

HBOS colleaguesIf you were previously a member of the HBOS Group Money Purchase Scheme, or had the right to join, you became eligible to join Your Tomorrow from 1 February 2011.

Lloyds Bank colleaguesIf you were previously a member of a Lloyds Bank Pension Investment Plan (PIP), or had the right to join, you became eligible to join Your Tomorrow from: 1 August 2011 for non-Asset Finance and non-Commercial Finance colleagues 1 September 2011 for Asset Finance and Commercial Finance colleagues go to joining to find out more.

To view information about your benefits Log into YOUR PENSION
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Changes to factors

We're updating the factors we use to work out pension benefits

You have various choices about when you start taking your pension benefits from the Scheme, and how much cash you want to take at that time. The choices you make will affect the amount of pension you get.

To calculate how these options work for each member, we use certain factors. From time to time, we review these factors to take into account changing market conditions and other considerations. After completing our latest review, we've decided to make some changes.

You'll receive a communication either by post or email (if you've registered your email address), letting you know about the changes to the factors, and what this means for you.

This section of the website supports the information sent to you, along with some examples and FAQs. If you have any further questions please contact the Scheme administrator.

What does this mean for you?

Rather than explain it all in theory, we’ve included some practical examples below.

These examples show how the factors affect early retirement, and taking a cash lump sum. There’s also a range of FAQs to answer any immediate questions you might have. If you have any further questions, please contact the Scheme administrator.

Examples

How your pension could be affected by the new factors

If you plan to retire early

If you choose to start taking your pension before your ‘normal pension age’, you’ll get less pension income, to make up for the fact that it’ll be paid to you for longer. The earlier you start taking it, the more it reduces. We use an 'Early Retirement Factor' to work out how much your pension should reduce.

Please note, the Scheme has some smaller historic membership categories that have different terms to the main Scheme benefits. If that applies to you, we have included the detail of that in your notification letter, but it won’t be reflected in these examples which just cover the main Scheme benefits.

Raheema still works for Lloyds Banking Group.

She’s got 30 years’ pensionable service in the Lloyds Bank Pension Scheme and final pensionable pay of £20,000, so has built up a pension of £10,000 a year. Raheema is 55 years old and has decided to Her pension will be reduced for early payment. With the old Early Retirement Factor, she’d have got £7,940 a year on that early retirement date. With the new factor, she’ll get a year.

Ruby left her job at Lloyds Banking Group five years ago.

She left with a deferred pension of £9,250 a year from the Lloyds Bank Pension Scheme She is now 57 and her pension has increased with inflation since she left to £10,000 a year. Ruby’s also decided to retire but as she is 57 and has a normal pension age of 60 she will only be retiring 3 years early. With the old Early Retirement Factor, she’d have got £8,710 a year. With the new factor, she’ll get a year.

If you plan to retire late

If you choose to start taking your pension after your ‘normal retirement age’, you might be able to get more pension income. This makes up for the fact that it’ll be paid to you for less time. The later you start taking it, the more you get. We use a ‘Late Retirement Factor’ to work out how much your pension should go up.

The factors we use when a member retires late are also changing. In the main, they’ll become less generous. We can’t provide a detailed example here, because the factors that are changing take account of any ‘missed’ pension increases between normal retirement age and the date the pension is put into payment.

But we will be able to offer more information to you by phone. If you are at or past your normal retirement age and thinking about retiring late and you want to know how this change in factors will affect your pension, please contact the Scheme administrator.

If you plan to take a cash lump sum

When you decide to start taking your pension, you can usually choose to give up some of your pension income for tax-free cash. This is called ‘commuting your pension’. The factor we use for this commutation sets out how much cash you can get for every £1 of pension you give up.

Your commutation factor is changing, and will become more beneficial than before. So it’s likely you’ll get more cash for every £1 of pension you give up. Here’s an example of how this might work in practice:

Ruby decided to retire early at age 57.

Note - Some members may have made “Additional Voluntary Contributions” (AVCs) to the Scheme and may choose to use some or all of these as part of the tax-free cash they are eligible to take.

FAQs

What's changing?

We’re changing the factors we use to work out pension benefits. These factors are part of our calculations for working out the different options members can choose from when they start taking their pension. Most of the factors used by the Trustee of the Lloyds Bank Pension Scheme No.1, Lloyds Bank Pension Scheme No.2 and the HBOS Final Salary Pension Scheme are changing.

The factors that we’re changing are as follows:

Commutation Factors
When you decide to start taking your pension, you can usually choose to give up some of your pension income for tax-free cash. This is called ‘commuting your pension’. The factor we use to calculate this commutation sets out how much cash you can get for every £1 of pension you give up. The most you can usually commute is 25% of the value of your benefits.

Early Retirement Factors
If you choose to start taking your pension before your ‘normal pension age’, you’ll usually get less pension income, to make up for the fact that it’ll be paid to you for longer. The earlier you start taking it, the more it reduces. We use Early Retirement Factors to work out how much your pension should reduce.

Late Retirement Factors
If you choose to start taking your pension after your ‘normal pension age’, you might be able to get more pension income, to make up for the fact that it’ll be paid to you for less time. The later you start taking it, the more you’ll get. We use Late Retirement Factors to work out how much your pension should go up.

Who's affected?

Any member of the Lloyds Bank Pension Scheme No.1, Lloyds Bank Pension Scheme No.2 and the HBOS Final Salary Pension Schemes who hasn’t started taking their pension could be affected.

How will I be affected?

We expect the majority of members will have more beneficial terms as a result of the changes. In particular, anyone who takes tax-free cash will be able to get more cash for every pound of pension they give up (subject to HMRC allowances). Most members who plan on retiring early will also have more beneficial terms.

Late retirement terms for most members won’t be as beneficial as they are now.

Your overall benefit promise is not affected by these changes. If you retire at the ‘normal retirement age’ and don’t take a tax-free lump sum, then your benefits won’t be affected in any way.

Why is this happening?

From time to time, we review pension scheme factors to take into account changing market conditions and other relevant issues. After completing our latest review of Lloyds Bank Pension Scheme No.1, Lloyds Bank Pension Scheme No.2 and the HBOS Final Salary Pension Schemes, we decided to make some changes. These changes are intended to be more beneficial for the majority of members.

When is this happening?

The new factors that are more beneficial for members are being introduced on 15 August 2018. Factors that are less beneficial will be introduced later - late retirement factors changes will come into effect on 15 February 2019.

These factors may have an adverse effect on the amount of pension you receive, or may end up offering better value in the long run. As we can’t know for sure right now, we’re giving members affected by these factors more time to think about their plans for retirement.

I just had a quote – can I have another one now the factors have changed?

If you received a retirement quote before 15 August 2018, the changes to the Scheme factors won’t have been included in our calculations. We don’t have any plans to automatically send out revised quotations, but if you go to Your Pension, you may be able to get a new quote yourself.

If you’re planning to retire after 15 August 2018 and you told us after that date, you won’t need a new quote. You’ll receive a pension based on the new factors automatically.

As the Late Retirement Factors don’t come into effect until 15 February 2019, any late retirement quotes you receive before then will use the current factors. This will change after 15 February 2019, when all late retirement quotes will take into account the new factors. The Scheme administrators can provide illustrative quotations for retirement dates after 15 February 2019 using the new factors on request.

What if I’ve paid Additional Voluntary Contributions?

Some members may have made “Additional Voluntary Contributions” (AVCs) to the Scheme and may choose to use some or all of these as part of the tax free cash they are eligible to take.

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