You’re an active hybrid member of the Scheme because you are a current employee who started HSBC before 1 July 1996 (or on, or after 1 July 1996 if you joined directly from M&S Financial Services). This means that you have both a Defined Benefit (DB) pension and a Defined Contribution (DC) pension pot
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How your Defined Contribution pension pot works
Your DC benefits began from 1 July 2015. That means:
HSBC gives you 10% of your first £23,900 pensionable salary
then 9% of anything over £23,900 up to the scheme earnings cap, currently £163,000.
Plus HSBC will match anything you pay up to 7% of your pensionable salary
It's quick and easy to change how much you are contributing and you can change your contributions once a month via My Choice.
HSBC pays most of the fees
HSBC pays the administration and investment management fees for the investment options currently available. However depending on the fund, there may be other investment costs which will be reflected in the price of the fund. These costs are variable and likely to be between nil and 0.2% pa.
See what you get per month
HSBC contributes 10% 10% of your first £23,900 pensionable salary then 9% of anything over £23,900 up to the scheme earnings cap currently £163,000
Your contribution 7%(adjustable)
HSBC matches your contribution 7%(up to 7%)
Total monthly payment into your Pension 24%
Tax-free cash video
As a hybrid member, you can choose whether you want to take your DB pension and DC pension pot together or separately. If you take them at the same time, you may be able to use your DC pension pot towards your overall tax-free cash lump sum. If you want to know more about how much tax-free cash you could take, there’s an easy way to estimate it. Why not watch this video today and find out more.
The Trustee has made available a range of investment funds for members. Each member is responsible for specifying one or more funds for the investment of their account, having regard to their attitude to the risks involved. If a member does not choose an investment option, their account will be invested into the default option applicable to them, which is managed as a “lifecycle” strategy (ie it automatically combines investments in proportions that vary according to the time to retirement age). The lifecycles are 100% invested in equities until twenty years from a member’s target retirement age from which point they transition gradually into less risky assets appropriate to the outcome targeted.
The Trustee carried out a value for members’ assessment, looking back over the Scheme year to 31 December 2019. The Trustee is required to assess the extent to which member borne charges and transaction costs for the Scheme Year represent good value for members.
The Sponsoring employer currently pays the AMC platform expenses and administration costs. Additional expenses (“AE”) are covered by members and are those costs incurred in the management of the underlying funds which are, by nature, flexible and therefore fall outside of the AMC. The Trustee has provided an illustration of the impact of the charges and costs on members pension pots for the default options as and four funds from the Freechoice range.
Check your pension
Keeping an eye on your pension benefits can help you hit your desired income at your target retirement date. Visit My Pension to see what’s in your DC pension pot and how well those investments are performing. If you’re not doing this on the HSBC network you can click here. You’ll need your username and password to log in. Don’t know yours?
From 30 May 2022 you will need to log in to Member Self Service (MSS) to see how much DB pension you accrued as at 30 June 2015 and how it has increased since that date in line with any increases that you may have had to your DB pensionable salary.
Over the last few months, the UK has seen a significant increase in the cost of living, with UK inflation at its highest rate for 40 years.
More about the Scheme
When you leave the Scheme your DB benefits will be based on your DB pensionable salary at that date (you’ll lose the link to any future increases to your salary) and the money you and your employer are putting into your DC pension pot will stop.
You can find out more about your options on leaving the Scheme in the member guide, ‘Your DB and DC pension benefits working together’ (4.6MB, PDF) in our Information Centre, as well as on the ‘Opting out or leaving the scheme’ page.
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’ unused Annual Allowance from up to three previous tax years. For more information about the effect of the salary linkage on your Annual Allowance please refer to the ‘Your DB and DC pension benefits working together (4.6MB, PDF) ’.
Also, if you make contributions to any other registered pension scheme these will also count towards your Annual Allowance limit.
If you build up a large amount of pension savings over your lifetime, you may reach what is known as the ‘Lifetime Allowance’ (LTA). This amount includes the value of your pension entitlement built up across all registered pension schemes that you’ve been a member of, not just the HSBC Bank (UK) Pension Scheme.
If your savings exceed the LTA you’ll have to pay a tax charge on the excess, unless you have LTA tax protection.
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, there are a few ways in which your family and dependants could get 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 the ‘Choose your beneficiaries’ page and click on the question mark.
Want to work out exactly how much financial support your family would receive? You can use the calculations and examples in the ‘Your DB and DC pension benefits working together’guide. (4.6MB, PDF).
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 Nominations page in Member Self Service. From 30 May 2022 you will need to update these details on the nominations page on MSS.
If you’re on long-term sick leave or go on maternity, paternity, shared parental or adoption leave, HSBC will keep putting money into your DC pension pot and will base these payments on your DC pensionable salary. You can keep putting money into your DC pension pot as well. The amount you pay will be based on the salary you actually receive during your period of absence, rather than your DC 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 that you would receive if you were at work.
If you leave employment due to redundancy and have a ‘protected pension age’ (younger than age 55) you must leave service and take all your benefits (including any Additional Voluntary Contributions) at the same time to take advantage of it. Your DB member guide and, if applicable, the 2009 Change leaflet gives more information on which members can take these benefits before age 55.