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How ProfitShare works

To give you a better idea of the difference ProfitShare could make, let’s introduce you to Harry.

 Meet Harry

GlassesHarry has just joined his employer’s pension plan.  He’s aged 30 and he’s decided to contribute £230 each month until he retires at age 65.

He'll also transfer £25,000 from a previous pension into his employer's pension plan.

 Harry’s projected retirement savings

The retirement savings Harry's able to build up by age 65 depends on how his chosen investments grow each year, as shown in the example below.

Assumed rate of investment growth

These figures aren't guaranteed and are just an example. Harry could get more or less than this.

We've assumed he'll increase his pension contributions in line with inflation each year and that he'll contribute until he retires at age 65. We've also assumed we'll apply a yearly management charge of 0.75% to all his retirement savings.

We've assumed that inflation will reduce the buying power of Harry's retirement savings by 2% each year. We've allowed for this by reducing the growth rate to 2.1%. This should give a more realistic view of what Harry could buy with his plan if his retirement income was payable today.

 The impact of ProfitShare for Harry

Let's assume Harry benefits from a ProfitShare award equal to 0.15% of the value of his plan each year. Let's also assume the value of his investments grow by 2.1% each year.

ProfitShare impact on Harry

These figures show that, over time, ProfitShare could increase Harry's retirement savings from £164,728 to £170,458. This would give him an extra £5,730.

You should remember that this is only an example, ProfitShare and investment returns are never guaranteed. This means that while there’s a chance your savings could grow, they could also fall in value. So you could get back less than you started with.

How your plan qualifies

Your plan qualifies for ProfitShare if it began with us on or after 1 July 2001. If this applies to you, we'll automatically set up a ProfitShare account under your plan. You don't need to lift a finger.

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