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Coronavirus (Covid-19) - an update from the Nestlé Pensions team

The coronavirus outbreak means that individuals and companies need to change the way they work. As a result, the Nestlé Pensions team, along with many other teams around the UK, has moved to home working to try and limit the spread of the coronavirus.

So that we can continue to deliver our service, we’ve made significant changes to the way that we’re working within the Pensions team – spending time delivering the key services that our members need. This means that, for the time being, we will not be answering the helpline but we will look to reinstate this service as soon as we can.

A limited number of staff are also visiting the office in Gatwick regularly so that they can collect and scan the post and send out letters.

We are prioritising certain types of cases

As you would expect, there have been some challenges affecting how quickly the team can respond to requests because of the changes in our ways of working. As a result, we are having to prioritise the following types of case work:

  • paying retirement benefits,
  • setting up new pensioners so that they can be paid,
  • processing cases where members have died, and
  • processing requests to change how your pension builds up.

Be aware of delays

All other enquiries are still being processed but will take longer than usual, so please expect delays in responding to your requests.

Contact us by email or post

Please remember that we currently have no helpline running, so if you have questions about your pension, or changes to report in your circumstances, please contact the team by email (pensions@uk.nestle.com) where possible.

You can also continue to contact the team in writing at:

Nestlé Pensions
1 City Place
Gatwick
RH6 0PA

Pension fund investments

You may have heard about the falls in stock markets and the uncertainties surrounding investments in the media recently – it’s likely that this uncertainty will continue for a while.

How will Covid-19 affect my pension?

In the middle of March stock prices around the world fell. Since then, prices have gone up again, but overall, the average price of shares is lower now than it was at the start of March. It’s possible that stock prices will continue to go up and down in value for some time to come while there is so much uncertainty about the future around. While it’s normal for shares to go up and down in value, these recent changes were bigger than we’d have expected under normal circumstances.

 

We’re aware that this will mean different things for different people and will depend on what kind of pension savings you have, and how far away you are from retirement for example. However, the main thing to remember is not to do anything too hastily.

The information below relates to different sections of the Fund. If you’re unsure which section you’re in take a look at your payslip or log in to your account).

DB Core/DB CorePlus

If you are building up pension in a ‘defined benefit’ (DB) scheme like DB Core or DB CorePlus, your benefits don’t depend on what happens in the stock markets. The Trustees have put in place an investment strategy that helps protect the Fund’s investments from periods of volatility like the one we’re experiencing at the moment.

If you’re making additional voluntary contributions, or if you’re saving into a DC Core account on your earnings above the earnings cap, please read the DC Core section below.

DC Core/DC Start

In a ‘defined contribution’ (DC) scheme like DC Core or DC Start, you and Nestlé both pay into an individual pension savings account. This account is then invested with the aim of growing its value (through investment returns). When you reach retirement, you can choose how to use the money in your account. The size of your account will depend on how much you and Nestlé pay in, and how your investments have performed over time.

Because Nestlé tops up what you save, and you get tax relief from the government – there’s actually a lot more going into your pension savings account than just the money that you’re saving. So, stock market falls would have to reduce the value of your pension savings account by a lot before there was less money in there than the amount you have saved.

The recent stock market falls have affected many of the funds in DC Core and DC Start negatively – since March we have seen the value of most of the DC funds move up and down a lot. As we mentioned earlier, it’s likely that this will happen for some time to come while the future is uncertain.

If you’re a long way from retirement, there’s still time for your investments to recover

By continuing to save into your account, you will continue to benefit from Nestlé’s contributions and from the tax and National Insurance relief that applies to your pension savings. All of this builds up over time. If you’re not close to retiring and the value of your pension savings account has gone down in the last few weeks, there’s still plenty of time left for it to go up in value again before you need the money.

In the past, we’ve seen markets recover following sudden falls in the market

In the past, sudden falls in stock markets, like those we’ve seen recently, have been followed by periods of growth when markets recover. Following global pandemics like SARs in 2009, we actually saw the markets rebound very quickly. So, as long as you are prepared to wait, you may find that the value of your pension savings recovers well over time.

You could benefit from buying more shares at a cheaper price

Also, the savings that you are currently making to your pension savings account might be able buy a greater number of certain shares at a cheaper price than they did before the Coronavirus outbreak. This will depend on what you are invested in though.

If you are closer to retirement and invested in the Lifetime Pathway fund your investments will have switched to lower risk funds

If you are closer to retirement and invested the Lifetime Pathway fund (the default investment arrangement), your investments will switch to lower risk investment funds as you approach your target retirement age. This switch begins 15 years from your target retirement age and in the five years before you reach your target retirement age, your investments start to switch into cash. As a result, changes in the stock market will have had less effect on your pension savings account’s value than earlier in your working life. If you are a DC Start member, your account can only be invested in the Lifetime Pathway fund.

Keeping your target retirement age up to date helps us to know when to start switching your investments

It’s important to keep your target retirement age updated as this is the age we use to work out when your investments will start to move into lower-risk funds if you’re invested in the Lifetime Pathway fund. If your target retirement age isn’t in line with your plans for the future, there’s a risk that your investments could start to move into lower-risk funds too early or too late.

Find out more about the Lifetime Pathway fund and how it works.

More detail about what is happening to DC investments in general

The link below will take you to a helpful video (made by Fidelity International, who hold our DC investments). It explains what’s been happening as a result of Covid-19, the impact this may have on your finances and what you might want to do about it.

Watch Fidelity’s DC investments video

Don’t make any hasty decisions when it comes to your DC savings account.

Instead, consider your circumstances carefully and speak to an independent financial adviser if you are unsure of what action to take.

To find an independent financial adviser, visit unbiased.co.uk

Beware of scams

Sadly, we have seen an increase in scams since the Covid-19 pandemic began. Some people are using the uncertainty around the pandemic as an opportunity to try and scam people out of their money so please be very careful with your personal details and avoid giving them out to anyone that you don’t know.

Scams could come in the form of emails which ask you to click a link that takes you to a website to enter personal information or bank details. They may ask you to do this to ensure that your account isn’t locked, or a key service isn’t cut off. These are known as phishing emails.

Scams could also be a phone call out of the blue (known as cold-calling) asking you to provide personal information, or offering you the chance to get a great return on your investment to make up for any short-term losses that your pension savings might have seen. Most scammers will ask you to act quickly and/or offer a huge incentive – this is a clear flag that something is suspicious.

The latest scams also involve:

  • Fake lockdown fines – where people are sent a text message pretending to be from the government asking you to pay a fine for breaking the lockdown rules.
  • HMRC goodwill payments – this email will ask you to enter your bank details so that HMRC can give you a £258 goodwill payment.

Key things to remember about scams are:

  • Cold calling relating to your pension is illegal
    If anyone you don’t know calls you to offer something relating to your pension, hang up the phone. Pensions cold calling is illegal – legitimate pension schemes and advisers will never contact you in this way.
  • If it sounds too good to be true – it probably is
    As a general rule of thumb, if something is promising a huge profit or return on your investment, it’s probably a scam – particularly if there is pressure for you to act quickly.
  • Never give out your personal details to anyone you don’t know
    To protect yourself, and your pension savings, please make sure that you don’t give out any of your personal details over the phone, by email or by clicking on a link in an email.

The Pensions Regulator

The Pensions Regulator has lots of detailed information on their website about how to protect yourself from pension scams including this useful booklet which outlines what scams look like, how you can protect yourself, and what to do if you think you might be being scammed.

ScamSmart

The Financial Conduct Authority’s ‘ScamSmart’ website provides lots of useful information about how to spot a scam, how to check that what you are being offered is legitimate and many other useful resources.

The Pensions Advisory Service (TPAS)

The Pensions Advisory Service offers very thorough information on how to spot a scam, what to do if you think you have been scammed and what help and support they offer. You can read more on The Pensions Advisory Service website.

Other useful links

Worried about money?

The Money Advice Service offers free, impartial advice if you are worried about money. It’s run by the government, and offers:

  • Support over the phone or online,
  • Guides and advice to help you improve your finances, and
  • Tools and calculators.

Visit moneyadviceservice.org.uk to find out more.

They also have a specific section on Coronavirus.

Need help with your pension or want more information about how Coronavirus could affect it?

The Pensions Advisory Service (TPAS) are there to help you with your pension. They also have a section that deals specifically with Coronavirus and how it may affect your pension.

Read what TPAS has to say about Coronavirus and your pension.