Your pension is changing

1. Lower contributions

Since 1 January 2024 members who pay into the scheme have seen contributions fall from 9.8% of salary to 6.1%. The employer’s contribution rate has also reduced from 21.6% to 14.5%.

See how much you would pay by using the Contributions and Benefit Calculator.

2. A higher accrual rate for defined benefit (DB) pension

Paying in members will build more defined benefits (DB) in the Retirement Income Builder.

Currently active members build 1/85 of their salary (up to the salary threshold) in DB pension each year and 3/85 of their salary as a lump sum on retirement. This will increase for each year from 1 April 2024 to 1/75 of their salary for pension benefits and 3/75 of their salary for the lump sum, respectively.

Watch our video to see a reminder on how you build benefits in the Retirement Income Builder.

3. Higher cap for future pension increases

The benefits that you have built up in the Retirement Income Builder increase every year both before and after you retire in line with increases to official pensions which currently go up with CPI inflation. This provides a level of inflation protection for your benefits.

The annual increase for benefits built up from 1 April 2022 was to be subject to a maximum increase of 2.5% (coming into effect for increases from 1 April 2026). The changes mean these benefits will now be subject to a higher maximum increase of 10% rather than 2.5%. Increases will be as follows:

• Where inflation (currently CPI) is 5% or less, the increase will be matched.
• Where inflation is more than 5% but less than 15%, the increase will be 5% plus half of the percentage increase over 5%.
• Where inflation is 15% or more, the increase applied will be 10%.

4. Salary threshold change

There will be an increase in the salary threshold, the level from which paying in members start building regular savings in the Investment Builder, the defined contribution (DC) part of USS. The salary threshold will increase from £41,004 to £70,296. This salary threshold will be increased annually until 31 March 2028 in line with increases to official pensions, which broadly go up with CPI inflation, subject to certain limits. Currently this is limited to a maximum increase of 2.5% a year but from 1 April 2024 the £70,296 figure will rise in future years by a maximum of 10% (see the explanation of pension increases for how this will apply).