How did coronavirus affect my pension?

The coronavirus outbreak caused uncertainty in world stock markets, including those in the UK.

Short-term fluctuations in your savings, caused by events like the coronavirus outbreak, can look worrying, but it’s important to look at the bigger picture.

MoneyHelper has a handy website to help you manage your money through uncertain times.

Pension saving is about the long term

For younger savers who need investment growth, there’s plenty of time for the markets to right themselves when events like the coronavirus occur.

And for members in our glidepath who are more likely to be accessing their money in the near future, we take steps to protect their pension savings from unnecessary risks as they get closer to retirement. Please note that a glidepath doesn’t guarantee the value of your pension pot – the value of investments can go down as well as up.

Find out more about investment changes approaching retirement

What happened to my pension while I was furloughed?

You and your employer should’ve continued contributions to your pension while you were furloughed, based on the amount you were being paid. Remember that if you were on furlough and your employer wasn’t topping up your salary, the total amount you earn would’ve been lower. This meant your pension contributions would have been lower too.

The government started to contribute less towards your pay from July 2021 if your employer signed up to the Coronavirus Job Retention Scheme (CJRS). Your employer was expected to make up the rest of your furlough pay to a minimum of 80% of your normal wage.

The CJRS scheme ended on 30 September 2021.

Find out more about the phased approach the government took to end the Coronavirus Job Retention Scheme (CJRS) on

What contributions did employers need to pay?

  • Employers should’ve continued contributions at the regular agreed rate.
  • If your employer uses qualifying earnings to work out pension contributions, and your earnings fell below £520 per month, contributions may not have been due.
  • If your employer is using salary sacrifice, the rules were a bit different as contributions should’ve continued at the rate agreed with your employer. Check with your payroll department how it worked for you.

Employee contributions couldn’t be claimed back from the government under the CJRS. You should’ve continued to pay as per the legal minimums, or whatever was set out in your contract.

Read more about what to do if you want to reduce your contributions.

What happens to my pension if my employer went out of business because of coronavirus?

Your pension is your money, invested in your name. If your employer goes out of business, at any time, you’ll no longer receive contributions from them going forward but your pension pot is held separately and won’t be available to your employer’s creditors.

If your employer did go out of business and pension contributions were/are outstanding, this can impact your ability to claim a small pot lump sum until those contributions have been paid. An Insolvency Practitioner will be responsible for gathering all the information on pension payments that your employer should’ve made before the insolvency date. This process can take a considerable time to complete.

If I was made redundant, do I have to pay pension contributions based on my redundancy pay?

The tax-free redundancy payment (up to £30,000), ie the lump sum you get for being made redundant, isn’t counted as pensionable earnings and therefore isn’t subject to pension deductions. What you receive in your final period of employment which is your normal taxable pay is subject to the same auto-enrolment deductions.

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