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Your choices on the journey

Your promised pension will usually be payable from a certain date, based on your age and the rules of your original pension scheme. You can contact your administrator for this information (details above in “Is my pension with Clara?”).

You do have choices. You may be able to retire earlier or later than that date, although likely no earlier than your 55th birthday, increasing to 57 from 6 April 2028. 

You may also have the right to transfer your Clara pension to another pension scheme of your choice. This can legally require independent financial advice, which you may have to pay for. Make sure you read our scam warnings before agreeing to transfer. 

If you want to talk through your options, find the right contact details for your pension. These details will be for the administrator who runs your pension day to day. They’re the best people to speak to about retirement options and pension transfers.

If you need to update your personal information, such as changing your postal address, your administrator will take care of this too. Many administrators allow you to do this quickly and conveniently online. 

A place where pension schemes are brought together

Clara Pensions is a Defined Benefit pension scheme consolidator, also known as a ‘superfund’. A superfund or consolidator (these are two names for the same thing) brings multiple pension schemes together, creating something bigger and more efficient. 

Pension schemes that consolidate with Clara will transfer their members and assets to us, to form a section of the Clara pension superfund. As more pension schemes become part of Clara, more sections are created.

Being part of something bigger brings benefits of scale – much like supermarkets can offer more choice at lower prices than a corner shop. We’re set up from day one to look after tens of thousands of members and billions of pounds of investments. We can be more efficient in how we’re run and how we invest. Crucially, we’re committed to providing a better member experience, in a way that smaller pension schemes aren’t able to. This is why we describe ourselves as ‘member-first’.

Clara means safer pensions

Pensions and investments come with risks. We’ve looked at all of these risks and developed our member-first model to mitigate them.

The risks are:

Financial – Having enough assets to pay the promised pension of members 

Pension schemes use a range of investments. If these investments underperform, inflation increases above expectations, and/or life expectancy rates increase more sharply than projected, the result can be a gap between the amount the scheme needs to pay (liabilities) and the amount it has (assets). Clara has strong safeguards to ensure we hold the money to pay your promised pension. Each transfer to Clara is checked by The Pensions Regulator to ensure it’s properly funded, and the capital in the buffer is available until member benefits have been secured in full. Members also have the protection of the Pension Protection Fund.

Personal information – Making sure pension records are correct and up-to-date

This is not always easy for pension schemes to do, but because we take the security of your personal information very seriously, we’ve implemented all necessary safeguards. The Pensions Regulator has tested us and continues to supervise us. And our administrators have to continually satisfy us that they have appropriate procedures and security in place.

Scams – Keeping your pension safe

Sadly, we’re witnessing a continual rise in scams targeting people’s retirement savings. To help protect you, we’ve put rigorous checks in place. You can find out more on our scams page.

Your pension is likely to be one of the most valuable things you’ll ever own, built on decades of your hard work and contributions from you and your employer. So it’s very much in your best interests to be alert to scams that could jeopardise all of this. 

Since 2015, an estimated 40,000 or so people in the UK have lost more than £10 billion in pension scams. And this number keeps growing. People are lured into these scams by seductive opportunities to increase or access their money. So if an offer sounds too good to be true, it probably is.

Red flags include:

• Contact out of the blue with free pension reviews or investment opportunities
• Time-limited offers with high pressure to make a decision quickly
• Early access to your pension (you typically can’t take your pension before you’re 55, increasing to 57 from 6 April 2028)
• Unusually low-risk and high-return investments
• The need to download software or share financial information
• Phrases like ‘pension liberation’, ‘loan’, ‘loophole’, ‘savings advance’, ‘one-off investment’, ‘cashback’
• Guarantees of better returns on pension savings
• Complicated investment structures
• Fixed-term pension investments, which often mean people do not realise something is wrong for several years

As a Clara member, you don’t need to do anything with your pension, as we’re diligently taking care of it while you get on with life. If anyone suggests you take action, you should think carefully. We recommend seeking professional advice before making a decision.

There is some great advice on avoiding scams, information on the warning signs and guidance on how to get help available online.

Money Helper website: How to spot a pension scam | MoneyHelper

FCA website: ScamSmart – Avoid investment and pension scams | FCA

A safe place for your pension

Companies that run defined benefit pension schemes are increasingly looking to remove the risk of these pensions from their business. They have two main options to do this:

Insurance – The assets and liabilities of the pension scheme are transferred to an insurance company for a premium, and the insurer takes on responsibility for part or all of the scheme. When this happens, members of the pension scheme move on to become policyholders of the insurance company, getting an annuity (a policy that guarantees the payment of their pension income).

Consolidation – A company such as Clara provides a bridge to the insurance option, offering the employer a clean break from the responsibilities and risks of running the pension scheme, while protecting members’ benefits.

If the insurance option is achievable quite quickly, a move to Clara won’t happen. So your pension will only move to us as a safe stepping stone on its journey to an eventual insurance buyout.

A bridge to buy-out

Once your pension is transferred to us, it will stay in its section of Clara, with its own capital buffer, until it’s ready to move on to an insurer. While there’s no set time limit on this process, we typically expect it to take 7-10 years.

Money for your dependents

If you die before your pension has paid any money to you, especially below the age of 75, there will probably be a lump sum death benefit. How much is payable will depend on the scheme rules, but it’s usually a set amount. It will only be payable to your dependents; most often your spouse, civil partner or any dependent children.

Let us know your wishes

Contact your administrator (details in “Is my pension with Clara?”) to let them know who you want any benefits to go to in the event that you die before your pension is paid. This is usually done through an expression of wish form or a nomination of beneficiaries. The trustees of Clara will look at this with the administrator at the point when a decision needs to be made. The decision will also take into account any Will you have in place.