You can put as much money as you want each year into your DC pension pot, but there’s a limit to the amount of savings the government will let you have tax relief on. The overall limit each year is called the Annual Allowance. Anything that you or HSBC puts into your DC pension pot above the Annual Allowance is taxed at your marginal rate of tax, unless you can ‘carry forward’ any unused Annual Allowance from the previous three tax years. 

Also if you make contributions to any other registered pension scheme these will also count towards your Annual Allowance limit. 

The Lifetime Allowance (LTA) was the maximum amount that someone could save in their pension without incurring additional tax. The LTA has now been abolished and has been replaced by two new lump sum allowances. From 6 April 2024, the total amount of your pension savings (across all your pension schemes) that can be paid as tax-free lump sums will be limited by the Lump Sum Allowance and the Lump Sum and Death Benefit Allowance. 

The Lump Sum Allowance is a limit on the total amount of tax-free cash you can take at retirement. It is currently set at £268,275 for most people, although you may have a higher allowance (for example, if you hold an LTA protection). 

This limit applies if you take a one-off tax-free cash lump sum when you start taking your pension pot. It will also apply to the total amount that you receive tax-free if you decide to take multiple lump sums over a period of time (part of which are tax-free). If the total amount of tax-free cash lump sum(s) across all your pension schemes (including from defined benefit schemes) exceeds your available Lump Sum Allowance, you will pay income tax on the excess amount at your marginal rate. 

The Lump Sum and Death Benefit Allowance is a limit on the total amount of tax-free lump sums payable at retirement, on your death or in cases of serious ill health. It is currently set at £1,073,100, for most people, although you may have a higher allowance (for example, if you hold an LTA protection).
If the total tax-free lump sums or death benefits paid out exceeds your available Lump Sum and Death Benefit Allowance, the recipient will pay income tax on the excess amount at their marginal rate. 

The amount of these allowances that you have available when your benefits are paid from the Scheme may be reduced if you have already received a tax-free cash lump sum from one of your pension schemes or if you started to receive benefits from one of your pension schemes before 6 April 2024.

If you have received any benefits before 6 April 2024 we are required to calculate your available allowances on the assumption you took the maximum amount of tax-free cash that you could when you took your benefits. If you took less tax-free cash than this, you may benefit from applying for a Transitional Tax-Free Amount certificate. In order to do so, you will need to provide us with evidence of the benefits you have previously received, including the amount that was paid to you tax-free.

If you get a certificate this will mean that the adjustment to your Lump Sum Allowance and  Lump Sum and Death Benefit Allowance will reflect the actual amount of tax-free cash you have received. This may lead to a better or worse outcome, so you should consider carefully whether or not to apply for a certificate. 

If you are unsure about whether or not you would benefit from applying for a Transitional Tax-Free Amount Certificate we recommend you speak to an independent financial adviser.

Please note that if you want to apply for a certificate you need to do this before you take a tax-free lump sum for the first time after 5 April 2024. If you do not get a certificate before this you will lose your right to apply for one. This could mean you may end up paying more tax than you need to when you receive your benefits from the Scheme and from other pension schemes of which you are a member.

Please also note that the information in this section (Your new lump sum allowances) may not apply to Guernsey, Jersey or Isle of Man members.

For more information, please contact the HSBC Administration Team.

You can find out more here. 

While you’re working at HSBC, you may be able to transfer some or all of your money to another pension scheme and stay a member of the HSBC Bank (UK) Pension Scheme for future service. Remember, while your DC pension pot is invested in the pension scheme HSBC will pay the administration and investment management fees, but if you transfer your money out your new pension scheme may require you to pay administration and investment management fees. 

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If you’ve built up pension savings with a previous employer or in a personal pension, you may be able to transfer them into the pension scheme.

The amount of savings you end up with from any transfer-in payment depends partly on how well your investments perform and when you take your DC pension pot.

The HSBC Bank (UK) Pension Scheme may provide DC benefits in a different way from your previous scheme; for example, your previous scheme may link benefits directly to your salary. So it’s worth thinking carefully about whether transferring your pension savings into your DC pension pot will make the most of your money.

For more information about transferring savings from another pension scheme, see the DC member guide, in our Information Centre.

If, while working for HSBC, you want to stop paying into your DC pension pot, you can simply visit My Choice on the My Benefits website. If you opt out, HSBC will stop putting money into your DC pension pot, your own contributions will also stop and you’ll be treated as a leaver. As an opt-out member, you’ll still be covered for the lump sum death benefit, payable through the Life Assurance Scheme. Your spouse/civil partner won’t be eligible for a pension if you die in service.

You can find more information on this under the ‘Leaving the Scheme' section on the Leaving HSBC page.

If you die while you're working for HSBC, your family and dependants could get the following financial help. These include:

• Lump sum death benefit 
• Spouse/civil partner’s pension 
• Dependant’s allowance
• Children’s allowance

For more information about protection benefits, visit our 'Choose your beneficiaries' page. Or see the DC member guide, ‘Knowing your DC pension pot’ (2.6MB, PDF) in our Information Centre.

Any consideration of a divorcing couple’s assets usually includes pension rights. Our HSBC Administration Team can help if you want more information. Remember to update your personal details if you’re getting divorced or dissolving your civil partnership. You should also make sure your details are up to date on the My Beneficiaries page in My Pension. (click here if you're outside the HSBC network and you can log in using your username and password)

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If you’re on long-term sick leave or go on maternity, paternity, shared parental or adoption leave, HSBC will continue putting money into the pension scheme based on your pensionable salary. You can keep putting money in as well. The amount you pay will be based on the salary you actually receive during the period of absence, rather than your pensionable salary.

If your salary is reduced (or if you’re not being paid), any benefits that continue to be provided would be based on the notional pensionable salary you’d receive if you were at work.