Nationwide Pension Fund Boost your pension with Additional Contributions through youchoose

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1 Nationwide Pension Fund Boost your pension with Additional Contributions through youchoose Additional Contributions are a tax efficient way to improve your pension savings. Boosting your pension by making extra contributions will help you to enjoy the lifestyle you want when you start to take your Nationwide pension.

2 When can I make Additional Contributions? The scheme provides you with the chance to start, stop or amend Additional Contributions through youchoose at anytime between 1 January and 31 August. Changes will normally take effect the month following your selection. You can also elect to make Additional Contributions through the annual youchoose enrolment in October to take effect from the following January. Important reminder please remember you must re-enrol each October if you wish your Additional Contributions to continue into the following year, otherwise they will stop on 31 December. What are the benefits of making Additional Contributions? Generous enhancement Nationwide will enhance all Additional Contributions made through youchoose by 6%. For example if you select 100 per month, 106 per month will be invested as an Additional Contribution. Save on tax and NI - Additional Contributions made by salary sacrifice means your gross salary (before tax) is reduced which, in turn, means you pay lower tax and National Insurance (NI) payments. Boost your retirement income making Additional Contributions will help you increase your income when you retire. Some or all of your Additional Contributions may be able to be taken as a tax-free lump sum. A flexible way to save you can start, stop or amend the Additional Contributions you make through youchoose. What are my Additional Contributions options? You can make Additional Contributions through Pension Credits, Investment Funds, or the Nationwide Group Personal Pension.

3 How do Additional Contributions made to Pensions Credits work? Pension Credits are a low-risk way to build up your pension. They enable you to buy a set amount of pension calculated as the total contributions paid during the scheme year (1 April to 31 March) divided by a factor based on your age on 31 March. Each annual pension credit is then revalued annually on 1 April by the annual increase in the Retail Prices Index (RPI) while you remain an active member. If you leave active scheme membership, the pension you have built up (post April 2011) is revalued in line with increases to the Consumer Prices Index (CPI) subject to a maximum of 2.5%. Pension Credits built up will be added to your main scheme pension at the time you choose to take your pension. Once in payment, this additional pension will increase by the same rate as your main pension. The pension will also include a dependant s pension payable in the event of your death. How do Additional Contributions into the Investment Funds work? Unlike Pension Credits which allow you to buy a known amount of pension, making Additional Contributions into the investment funds mean you do not know how much pension you are buying until you actually take your pension. The Investment Funds available are with Fidelity and Prudential. Fidelity Option: Additional Contributions are invested in one or more of the six available funds (managed by BlackRock through the Fidelity platform) shown below. Fund Name/Investment Risk BlackRock Cash Fund low BlackRock Over 15years UK Gilt Index Fund medium BlackRock Consensus Fund medium BlackRock Corporate Bond Index Fund medium BlackRock UK Equity Index Fund high BlackRock World (ex- UK) Equity Index Fund high Depending on the level of risk you are willing to accept, this option offers the potential to grow your Additional Contributions. However, higher risk may also incur losses, particularly over the short term, so you should think about your circumstances and appetite for risk. The amount of additional pension purchased depends on your fund value at retirement and the conversion factors applicable at that time. Once in payment, your pension will increase by the same rate as your main pension. Unlike the Pension Credit option, the additional pension will not include a dependant s pension payable in the event of your death.

4 Fidelity Lifestyle Option: If you would like to invest Additional Contributions but do not feel comfortable choosing between the individual funds you can select the Lifestyle option. This initially invests contributions into the BlackRock Consensus Fund, but aims to protect the value of your pension pot as you approach retirement by moving your money into the BlackRock Gilts and Cash Funds within 10 years of your selected retirement age (65 unless you notify Fidelity otherwise). Prudential Option: Additional Contributions go into a deposit based account with Prudential which is credited with gross interest (i.e. attracts tax free interest). The rate of interest applied tracks the Bank of England base rate, offering security over the shorter term as the value should not decrease and your fund receives interest for every day it is invested. There are no administration charges with this arrangement and this option offers low risk. The amount of additional pension purchased depends on your fund value at retirement and the conversion factors applicable at that time. Once in payment, your pension will increase by the same rate as your main pension. Unlike the Pension Credit option, the additional pension will not include a dependant s pension payable in the event of your death. How do Additional Contributions to the Nationwide Group Personal Pension (GPP) work? Additional Contributions go into an individual private policy with Friends Life and remain separate from your Nationwide Pension Fund benefits. Your contributions will automatically be invested into the default fund, the Friends Life Balanced Index Fund of Funds. However, a wider selection of funds is also available for members who wish to consider using them. Further details about the different funds available can be found in the following brochure: Funds Descriptions, their charges and Risk warnings: Each fund carries a degree of risk and the value of your policy can go down as well as up. Nationwide GPP At the time you take your pension you can use the value of your Additional Contributions pension pot to shop around and buy a pension from an insurance company offering the best deal. This can be tailored to fit your needs (e.g. a pension payable solely to you or one payable to your dependant on your death.)

5 Where can I get further details about my Additional Contributions options? More details about making Additional Contributions including a simple flowchart guiding you through the different options can be found on the Pensions intranet. This includes access to detailed information about the Fidelity and Prudential investment options. Also on the Pensions intranet you will find a Pensions Calculator which will help you estimate whether you are on course to have a comfortable retirement by giving you a projected value of your pension as a percentage of your salary. How to contact us Nationwide Pension Fund is run on a day to day basis by the Pensions Team. If you have any questions after reading this leaflet then we re here to help you. By phone: (01793) By post: Employee Pensions Nationwide Building Society Nationwide House Pipers Way Swindon SN38 2GN By pensions.team@nationwide.co.uk

6 What if I have a question? If you have any questions about Additional Contributions, please contact the Pensions Team. Nationwide Building Society Head Office, Nationwide House Pipers Way, Swindon, Wiltshire SN38 1NW HR136 (June 2013)