We hope you’ll find the following answers helpful.

We’ve laid these questions out in the same order as the sections in your pension statement, so if you’re looking for the answer to a particular topic, check which section it’s in in your statement, then find that section below.

Find out more about how your pension builds up in Your pension.

DC Chair’s statement

How can I request a copy of the Chair’s statement?

You can either download the DC Chair’s statement or email pensions@uk.nestle.com to ask the Pensions Team for a printed copy.

Look at your figures (part 1)

How can I see a breakdown of my DB pension?

If you’ve built up pension in more than one DB section of the Nestlé UK Pension Fund, your pension might have built up slightly differently in each one. You can see a breakdown of this by logging in to Your account. To log in, you’ll need your member number, which you'll find in part 4 of your statement.

Your 2025 statement

Why do some of the figures in my 2025 statement look different to my figures in the modeller?

We are currently working on a few of the calculations that sit behind the modeller, which we’ll be able to update soon. For now, please use the figures in your 2025 pension statement for your retirement planning.

Why is the estimated value of my future pension from my DC account different from the value shown in my 2024 statement?

We’ve shown you the benefits you might be able to get from your DC account by assuming you'll convert it to a pension with an insurance company. This kind of product is also known as an annuity. It’s important to remember that the cost of buying an annuity varies and is likely to change each year. You don’t have to convert your DC account into an annuity, though – you can find out more about the other options you have for taking your savings in part 1 of your statement.

When we work out the amount of pension you could buy with your DC account, we base our calculations on several things. These include:

• How much we expect your DC account to be worth at your target retirement age, which is based on factors like:
  • when you expect to retire,
  • the savings you’ve already built up in your DC account, and how they have changed over the year,
  • your assumed future savings to DC Core,
  • future investment returns on your current and future savings, and – if you’re member of DB Core or DB CorePlus – how much we expect your salary to grow above the DB pensionable earnings cap.
• How much we expect it to cost you to buy an annuity using the value of your DC account that will guarantee you an income for the rest of your life.

This year, the value of your future pension from your DC savings may be higher than the value shown in your 2024 statement.

In general, there are likely to be three key reasons for this:

• How your DC account has grown over the year compared with what we assumed last year.
• We’ve assumed higher future investment returns for most funds. The younger you are, the bigger the impact this has on the projected value of your DC account when you retire. This is because we’ve assumed that you’re likely to be benefitting from higher investment returns over a longer period.
• We’ve estimated that you may be able to buy more pension with the same amount of money when you retire because annuity rates have improved. In the last year, rates have typically improved by around 10%. We base our projections on current rates, so this is likely to change and may not be the case when you come to retire and buy an annuity.

It’s also worth noting that the estimated future DC pension shown in your statement will likely be different than the figures shown in your statutory money purchase illustration, which we’ve uploaded to Your account. This is because the statutory statement requires annuity rates to be based on financial conditions in February 2024. This means that the rates used to calculate the projections in your statutory money purchase illustration do not represent current market conditions. In addition, the annuity rate used in your statutory money purchase illustration assumes that the annuity you’ll buy when you retire won’t have any future pension increases, nor will it provide a spouse’s pension if you die before your spouse. You can find more information about the changes in to the assumptions we’ve used in your statutory money purchase illustration in Why are my statutory money purchase illustration (SMPI) figures different to my pension statement figures? below.

Look at your figures (continued)

Why is my DB pension different at retirement than it was last year?

There are many reasons why the pension we estimate you’ll receive when you retire can vary from year to year. These could include your pensionable earnings or your target retirement age changing, or perhaps you’ve switched from DB CorePlus to DB Core.

It is also important to bear in mind that:

• Over time, prices for goods and services tend to increase, this is known as inflation. There are a number of ways of measuring inflation: retail price index (RPI) and consumer price index (CPI) inflation are two of the main measuring tools published by the Office of National Statistics. Historically RPI inflation tends to be higher than CPI inflation.
• When we calculate your pension at retirement, we allow for how your DB pension will grow between now and your target retirement age. Each period of service may use different measures of salary growth, RPI and CPI inflation, and the calculation also allows for the different maximum increases that apply each year.
• Showing how much you’ll be able to buy with your pension when you retire helps to illustrate how much your pension will be worth at that time. We then adjust this pension to remove the effects of future inflation. This is known as showing your pension in current-money terms.

Why is the amount of tax-free cash I can exchange my DB pension for different from last year?

Under current HMRC rules, you can take up to 25% of the value of the defined benefit (DB) benefits you’ve built up in DB Core or DB CorePlus as tax-free cash when you retire, up to a maximum amount of £268,275. To do this, you’ll need to give up some of your DB pension. To work out how much of your pension you’ll need to give up for the amount of tax-free cash you’ve chosen, the Trustees apply a number of factors to calculate your ‘exchange rate’. These are known as ‘commutation factors’, and they’ll be different for each member as they depend on that member’s current age, the age they’re planning to retire at, and the rate at which their pension is due to increase at once it’s being paid.

Each year, the Trustees review the commutation factors we use. When they do this, they’ll take advice from the Fund Actuary on whether they’re still reasonable and then consult with the Company on any changes.

Commutation factors are affected by wider financial conditions outside the Trustees’ control, such as changes in gilt yields and interest rates, among other things. The Trustees must make sure that commutation factors reflect these wider financial conditions as they change.

Because commutation factors are reviewed each year and may change, the amount of tax-free cash you receive in exchange for your DB pension could also increase or decrease each year. It’s likely you’ll only know exactly how much tax-free cash you’ll receive at the point you come to retire.

You can find out more about commutation factors and how they can affect the amount of cash you can exchange your DB pension for on our Calculating cash sums page.

How do I access my DC savings when I retire?

In your benefit statement, we’ve converted the projected value of your DC account when you retire into a pension. If you decide you’d like to access your DC account in this way, you’ll need to transfer it to an external annuity provider and buy an annuity product from them.

But there are different ways to access your DC account when you retire, which we also mention in your statement. For example, you could choose an income drawdown arrangement instead. Again, you’d need to transfer your DC account to an external provider that offers drawdown products to do this.

You may also be able to take some or all your DC account as part of your tax-free cash.

You can find out more about the different options you have in the Taking your benefits section.

I don’t save to DC Core – why have I got DC figures in my pension statement?

If you're a member of DB Core or DB CorePlus you build up benefits in your DB section each year until you reach the pensionable earnings cap – from 1 April 2025, this is £51,647. Once your earnings go over the pensionable earnings cap, you start saving into a DC Core account for the rest of that year. Nestlé will pay their matching contributions into DC Core too once you’ve reached the pensionable earnings cap.

In your pension statement, we make certain assumptions about how much your salary and the pensionable earnings cap may increase by in the future. Find out more in our assumptions document.

So, even if your pensionable earnings have not gone above the pensionable earnings cap before now, we have assumed that they might do at some point in the future.

At that point, you and Nestlé will start saving into a DC Core account. Because the pensionable earnings cap increases each year by a maximum of 2%, members’ pensionable earnings are expected to be more likely to exceed the cap at some point in the future. This is because your pensionable earnings have been assumed to grow at a faster rate than this for the purposes of this illustration.

Please bear in mind, though, that these estimates are based on assumptions that may or may not come true in the future.

Find out more about the pensionable earnings cap.

Last year my pension statement showed a DC savings account in the future, but this year it doesn’t. Why is this?

If you don’t currently make savings to DC Core above the pensionable earnings cap or make additional voluntary contributions (AVCs), there may be several reasons for this.

Last year the assumptions we made meant that we estimated your salary would go over the pensionable earnings cap in the future. Once it did, you would start saving into a DC Core account and build up DC savings.

The reasons why this might have changed could be:

1. Our projection of your salary has changed

   We base our assumption of your future salary on:

   • the salary you have received over the year to 31 March 2025
   • your base salary at 1 April 2025
   • future salary increases based on CPI plus 0.25% a year.

   These are likely to change each year – this could be because the hours you worked over the year are different, or because of changes in future inflation expectations.

Find out more in our assumptions document.

2. You’ve changed your target retirement age

   If you’ve changed your target retirement age in the last year, and it’s lower than it was before, your salary has less time to grow. So while you may have reached the pensionable earnings cap in the projected figures in your 2024 pension statement (in line with last year’s assumptions about salary growth), this year you might not have time to reach it as you won’t be working for as many years.

Why do I have a DC account value at my target retirement age, but no statutory money purchase illustration (SMPI) statement?

By law, we have to provide an SMPI statement for anyone who has a DC account balance at 31 March 2024. If you didn’t have any DC savings at 31 March this year, and your pension statement shows a DC account value at your target retirement age, it’s likely that we have predicted you’ll have some DC savings in the future based on the assumptions we make about how much your salary and the pensionable earnings cap will increase by in the future. Of course, we can’t know whether these assumptions will reflect what will actually happen to your salary or the pensionable earnings cap in the future.

Find out more in our assumptions document.

My DC account is showing a debit – what does this mean?

If your account is showing a debit, it means you have paid out some of your DC balance this year. There are several reasons why this could happen:

• you have a divorce debit that was paid from your DC Core account this year,
• you paid an annual allowance tax charge through ‘scheme pays’, which means your pension benefits were reduced in line with this, or
• you may have taken flexible retirement and used some of your DC account to fund your tax-free cash sum.

Set your target

Why should I bear income tax in mind when I set my pension savings target?

When you save into a pension account or build up pension, you don’t pay tax on your savings, up to certain limits. This means that when you take your pension and start treating it like income, you’ll need to pay income tax on it above a certain threshold – just like you do on your salary. The higher your pension, the more tax you’ll pay on it.

Find more about paying tax on your pension on the HMRC website.

Why do I need to be aware of tax allowances?

The annual allowance

The annual allowance is the maximum amount you can save in pension benefits from all sources (excluding the state pension) in a tax year without you having to pay a tax charge. The annual allowance is £60,000 for the current tax year for most people. If you exceed the annual allowance, you must let HMRC know about the excess and pay the annual allowance charge as part of your annual income tax return, or where possible through scheme pays (with a corresponding reduction in your scheme benefits).

However, if you haven’t used all of your annual allowance for the past three tax years, you can carry forward the unused amount. You must also declare this on your income tax return.

The lump sum allowance

The lump sum allowance is the maximum amount you can take as tax-free cash from your pension(s) when you retire. It is currently set at £268,275.

The lump sum and death benefit allowance

The lump sum and death benefit allowance limits the amount of tax-free cash you can take from your pension during your life and after your death. It is currently set at £1,073,100.

Value of your DC Account

Why has the value of my DC account increased compared to last year?

On top of any investment returns on your DC account, you have made contributions from your pensionable earnings for an extra year. You have also received the contributions that Nestlé makes on top of this.

Statutory money purchase illustration

Why are my statutory money purchase illustration (SMPI) figures different to my pension statement figures?

If you had a DC account balance at 31 March 2025, by law we must provide you with an SMPI as well as your pension statement. You can find yours by logging in to Your account.

Our specialist advisers have calculated the figures in your main pension statement with the aim of giving you a more realistic idea of how much pension you could receive. They use different, more up-to-date assumptions than the industry-standard assumptions the government requires us to use to calculate your SMPI.

What’s the difference between the assumptions you use to calculate the projections in my realistic and SMPI statements?

The assumptions we use to calculate your SMPI projections are different to the ones we use to calculate your ‘realistic’ ones. In your SMPI statement, we’ve had to assume that the pension you buy when you retire won’t increase with inflation every year, and that your annuity policy ceases when you die – in other words, it won’t provide a spouse’s pension if you die before your spouse or partner.

The rates for buying an annuity that doesn’t increase with inflation or include a spouse’s pension are lower than the rates for one which does – this means that when we calculate the pension you could receive using the SMPI assumptions, we estimate you’d be able to buy more pension with your DC savings. This is why your SMPI projections might show a higher estimated annual pension than your ‘realistic’ statement.

The ’realistic’ assumptions we use to calculate the figures in your main pension statement still assume that you’ll buy an annuity that will provide a spouse’s pension and that will increase every year to help it keep up with inflation when you retire. As these features ‘cost’ more to buy, the estimated pension we show in your pension using our more ‘realistic’ assumption may be lower than the one shown in your SMPI projection.

SMPI assumptions also assume different investment returns than the ones we use in your ‘realistic’ statement. When calculating your ‘realistic’ projections, we’ve also assumed that inflation is capped at 3%.

Assumptions

You can find out more about the assumptions your pension statement was based on in our assumptions document.

Still have questions?

Book a Spotlight session

Book your place on one of our new ‘Setting a retirement savings target’ Pension Spotlight sessions. We’ll talk you through all the figures in your pension statement and explain why they’re important for planning your retirement – including how to set your savings target.

Find dates and book your place

Contact the Pensions Team

The Pensions Team are also happy to help – get in touch using these contact details: