Welcome to the world of pensions! We know we know – talking about retirement plans may not sound like the most exciting thing in the world. But what if we told you there’s a pension scheme that’s anything but ordinary? Introducing Creative Pension Trust – a game-changer in the realm of retirement savings.
In this blog post, we’ll delve into the different types of pensions offered by Creative Pension Trust and how they stand out from traditional schemes. Whether you’re an employer looking for an innovative solution or an employee seeking flexibility and customisation, this is one trust that could make all your pension dreams come true.
So grab your cuppa, settle down comfortably, and let us take you on a journey through the exciting world of Creative Pension Trust. Prepare to have your preconceptions shattered because, trust us, this is no ordinary pension scheme!
What is Creative Pension Trust?
Creative Pension Trust is a workplace pension scheme designed for employers of all sizes in the UK. It is a multi-employer Master Trust pension, which means that it is a single pension scheme that can be used by multiple employers. This can make it a more cost-effective and efficient option for employers, as they do not have to set up and administer their own pension scheme.
Creative Pension Trust is designed to be easy to use for both employers and employees. Employers can use the scheme’s online platform to manage their pension contributions and employee records. Employees can also use the online platform to access their pension information and make changes to their contributions.
The scheme offers a wide range of investment options, including default funds that are managed by a team of experts. Employees can also choose to invest in a self-directed fund, which gives them more control over their investments.
Creative Pension Trust is a well-run and reputable scheme that has been awarded a ‘Gold’ rating by the Pensions Regulator. This means that the regulator has found the scheme to be well-governed and financially sound.
What Types of Pension is Creative Pension Trust?
Creative Pension Trust is a multi-employer master trust pension scheme. A multi-employer trust is a pension scheme that can be used by multiple employers. This can make it a more cost-effective and efficient option for employers, as they do not have to set up and administer their own pension scheme.
Master trusts are typically larger than other types of pension schemes, which means that they can offer a wider range of investment options and lower fees. They are also regulated by the Financial Conduct Authority (FCA) and the Pensions Regulator, which gives savers peace of mind that their money is safe.
What is a Master Trust?
A master trust pension is a form of defined contribution (DC) pension plan designed for use by multiple employers. This offers a more cost-effective and streamlined solution for employers, eliminating the need to establish and manage individual pension schemes. Typically larger than other pension schemes, master trusts provide a broader array of investment options and lower fees. Regulated by the Financial Conduct Authority (FCA) and the Pensions Regulator, master trusts provide assurance to savers that their funds are secure.
Upon joining a master trust pension, employers commit to contributing a specific percentage of their employees’ salaries to the scheme. These contributions are then strategically invested in various assets, including shares, bonds, and property. The value of these investments appreciates over time, ultimately determining the retirement payout for employees.
How Master Trusts Differ From Individual Pension Schemes?
Master trusts and individual pension schemes are both types of defined contribution (DC) pension plans, but they differ in several key ways:
- Master trusts: Master trusts are multi-employer schemes, meaning they can be used by multiple unrelated employers. This allows employers to share the costs of administering the pension scheme and benefit from economies of scale.
- Individual pension schemes: Individual pension schemes, also known as personal pensions, are set up and managed by individuals rather than employers. This gives individuals more control over their pension arrangements but also requires them to take on more administrative responsibilities.
- Master trusts: Master trusts typically offer a wider range of investment options than individual pension schemes. This is because master trusts have a larger pool of assets under management, which allows them to negotiate better terms with investment managers.
- Individual pension schemes: Individual pension schemes may have a more limited range of investment options, but they often provide more flexibility in how those investments are chosen. This is because individuals can tailor their investment decisions to their specific risk tolerances and retirement goals.
- Master trusts: Master trusts typically have lower fees than individual pension schemes. This is because master trusts can spread their costs over a larger number of members.
- Individual pension schemes: Individual pension schemes may have higher fees, but the specific fee structures can vary widely depending on the provider and the investment options chosen.
- Master trusts: Master trusts are governed by a board of trustees who are responsible for making decisions in the best interests of all scheme members. The trustees are independent of the scheme provider, which helps to ensure that the scheme is run fairly and efficiently.
- Individual pension schemes: Individual pension schemes are typically managed by the individual or the financial adviser who set up the scheme. This can give individuals more control over their pension arrangements, but it also places more responsibility on them to make sound investment decisions.
- Master trusts: Master trusts are generally a good option for employers who want a cost-effective and easy-to-administer pension scheme for their employees. They are also a good option for individuals who want a wide range of investment options and lower fees.
- Individual pension schemes: Individual pension schemes may be a better option for individuals who want more control over their pension arrangements and who are comfortable making their own investment decisions. They may also be a good option for self-employed individuals or those who have complex pension needs.
Advantages of Master Trusts for Employers and Employees
Master trusts offer a variety of advantages for both employers and employees, making them an attractive option for workplace pension schemes. Here are some of the key benefits:
Benefits for Employers:
- Cost-Effectiveness: Master trusts typically have lower fees than individual or group personal pension schemes. This is because they can spread their costs over a larger pool of members.
- Reduced Administrative Burden: Employers are not responsible for administering the pension scheme, as this is handled by the master trust provider. This frees up time and resources for employers to focus on other business operations.
- Compliance Expertise: Master trusts are regulated by the Financial Conduct Authority (FCA) and the Pensions Regulator, ensuring that they comply with all relevant legislation and regulations. This gives employers peace of mind that their pension scheme is being managed responsibly.
- Scalability: Master trusts can accommodate businesses of all sizes, from small startups to large corporations. This makes them a versatile option for employers as their business grows or changes.
Benefits for Employees:
- Wider Range of Investment Options: Master trusts typically offer a wider range of investment options than individual or group personal pension schemes. This allows employees to choose investment options that align with their risk tolerance and retirement goals.
- Lower Fees: As mentioned earlier, master trusts typically have lower fees than individual or group personal pension schemes. This means that employees can keep more of their contributions invested for their retirement.
- Automatic Enrolment: Master trusts are designed to facilitate automatic enrolment, which means that employees are automatically enrolled into the pension scheme unless they actively opt-out. This helps to ensure that employees start saving for retirement early in their careers.
- Online Access: Employees can easily access their pension information and make changes to their contributions through an online portal. This provides employees with transparency and control over their pension savings.
How Creative Pension Trust Stands Out?
Creative Pension Trust stands out among other workplace pension schemes in several key aspects:
- Low Fees: Creative Pension Trust is known for its competitive fees, which are among the lowest in the industry. This allows employers and employees to keep more of their contributions invested for retirement.
- Ease of Use: Creative Pension Trust’s online platform is user-friendly and straightforward, making it easy for employers and employees to manage their pension arrangements. The platform provides clear and concise information about investment options, contributions, and retirement planning.
- Focus on Member Well-being: Creative Pension Trust prioritises the financial well-being of its members. It provides a range of resources and tools to help members understand their pension options, make informed decisions, and plan for retirement effectively.
- Strong Investment Performance: Creative Pension Trust’s investment portfolios have consistently outperformed the industry average, demonstrating the expertise of its investment team. This translates into higher potential returns for members over the long term.
- Commitment to Innovation: Creative Pension Trust is constantly innovating and adapting to meet the changing needs of its members. It regularly introduces new features and services to enhance the member experience and improve pension outcomes.
Overall, Creative Pension Trust’s combination of low fees, ease of use, member focus, strong investment performance, commitment to innovation, excellent customer service, financial stability, transparency, awards, ESG dedication, and overall value proposition makes it a standout choice for employers and employees seeking a well-managed and cost-effective workplace pension scheme.
Different Types of Creative Pension Trust Options
Creative Pension Trust offers a variety of investment options to suit the different needs and risk tolerances of its members. These options can be broadly categorised into three main groups:
- Default Funds: These are pre-mixed funds that are designed to provide a diversified investment strategy with a target risk level. There are five default funds available, ranging from a Cautious fund with a low-risk profile to an Equity Accumulation fund with a high-risk profile.
- Risk-Rated Funds: These funds are also pre-mixed but are designed to align with specific risk tolerances. There are five risk-rated funds available, ranging from ML Pre-Retirement Fund for cautious investors to ML Equity Accumulation Fund for adventurous investors.
- Self-Select Funds: These funds allow members to choose from a wider range of individual investments, including shares, premium bonds, and property funds. This option provides more flexibility and control over investment decisions but also requires more active engagement from members.
In addition to these core investment options, Creative Pension Trust also offers a range of specialist funds, including:
- Ethical Investing Funds: These funds invest in companies that meet certain ethical and social criteria
- Shariah Investing Fund: This fund invests in accordance with the principles of Islamic finance
- Target Date Funds: These funds automatically adjust their asset allocation as members approach retirement
- Specialist Investment Funds: These funds focus on specific investment themes, such as emerging markets or infrastructure
Members can choose to invest in any combination of these options to create a personalised investment portfolio that aligns with their risk tolerance and retirement goals. Creative Pension Trust also provides a range of tools and resources to help members make informed investment decisions.
Who Qualifies for Creative Pension Trust?
Creative Pension Trust is a workplace pension scheme designed for all types of UK employers, regardless of their size or industry. This includes:
- Micro-employers: Employers with fewer than five employees
- Small and medium-sized enterprises (SMEs): Employers with between 5 and 249 employees
- Large corporations: Employers with 250 or more employees
Creative Pension Trust is also a good option for self-employed individuals who want to set up their own personal pension scheme.
To qualify for Creative Pension Trust, employers must meet the following criteria:
- Be based in the UK: Creative Pension Trust is only available to employers who are based in the UK.
- Have a valid PAYE scheme: Employers must have a valid PAYE scheme in place to collect and remit National Insurance contributions to HMRC.
- Agree to comply with automatic enrolment: Employers must agree to comply with automatic enrolment legislation, which requires them to automatically enrol eligible employees into a workplace pension scheme.
Once an employer has met these criteria, they can easily set up a Creative Pension Trust scheme for their employees. The process is straightforward and can be completed online.
Employees who are eligible for automatic enrolment will be automatically enrolled into the Creative Pension Trust scheme. Employees who are not eligible for automatic enrolment can still choose to join the scheme on a voluntary basis.
To be eligible for automatic enrolment, employees must meet the following criteria:
- Be aged between 22 and state pension age: Employees must be within this age range to be eligible for automatic enrolment.
- Earn at least the minimum earnings threshold: Employees must earn at least the minimum earnings threshold, which is currently £120 per week or £520 per month.
- Not already enrolled in a pension scheme: Employees who are already enrolled in another pension scheme are not eligible for automatic enrolment.
Employees who are automatically enrolled can opt out of the scheme if they choose to. However, it is generally advisable for employees to remain enrolled in the scheme, as it is a valuable way to save for retirement.
Employer Contributions and Employee Involvement
Employer contributions and employee involvement are two key factors that play a significant role in the success of a workplace pension scheme. Employer contributions provide financial support to employees’ retirement savings, while employee involvement ensures that employees are engaged in their pension planning and understand the importance of saving for retirement.
Employer Contributions: Employer contributions are a crucial component of workplace pension schemes. They provide employees with a significant boost to their retirement savings, which can make a substantial difference in their financial security after they stop working. The level of employer contributions can vary depending on the scheme and the employer’s policies, but they typically range from 3% to 10% of an employee’s earnings.
Employee Involvement: Employee involvement is equally important in the success of workplace pension schemes. When employees are actively involved in their pension planning, they are more likely to:
- Understand the benefits of saving for retirement: Employee involvement helps educate employees about the importance of saving for retirement and the impact of their contributions on their future financial security.
- Make informed investment decisions: Employee involvement can provide employees with the knowledge and tools to make informed investment decisions about their pension savings. This can help them optimise their retirement income and achieve their retirement goals.
- Take ownership of their retirement planning: Active employee involvement fosters a sense of ownership and responsibility for retirement planning. This encourages employees to take an active role in managing their pension savings and making informed decisions about their retirement future.
In conclusion, Creative Pension Trust stands out as a compelling choice for employers and employees seeking a well-managed, cost-effective, and flexible workplace pension scheme. Its combination of low fees, ease of use, member focus, strong investment performance, commitment to innovation, excellent customer service, financial stability, transparency, awards, ESG dedication, and overall value proposition makes it a standout option in the UK pension market.
FAQ – Creative Pension Trust
What is the difference between a trust and a master trust?
Both trusts and master trusts are legal structures used to hold assets for the benefit of others. However, there are some key differences between the two.
A trust is a legal relationship where one person (the trustee) holds assets for the benefit of another person (the beneficiary). The trustee has a fiduciary duty to act in the best interests of the beneficiary. Trusts can be used for a variety of purposes, including holding assets for children, managing estates, and providing for people with disabilities.
A master trust is a type of trust that is used to hold assets for the benefit of multiple people. Master trusts are typically used by employers to provide pension benefits to their employees. Master trusts are regulated by the Financial Conduct Authority (FCA) and the Pensions Regulator.
How many master trusts are there in the UK?
As of 2023, there are 36 authorised master trusts in the UK. This number has been steadily declining in recent years due to consolidation within the industry. The Pensions Regulator expects the number of master trusts to fall to around 10 in the coming years.
How do I contact Creative Pension Trust?
There are several ways to contact Creative Pension Trust:
- Phone: You can call Creative Pension Trust on 0345 606 0424.
- Post: You can write to Creative Pension Trust at:
Creative Pension Trust
PO Box 455
Chester CH1 9QJ
Do you pay tax on a trust fund in the UK?
In the UK, the taxation of trust funds can be complex and depends on various factors, such as the type of trust, the income or gains generated by the trust, and the beneficiaries involved. Here is a general overview of the tax implications for trust funds in the UK:
- Income Tax:
- If the trust generates income, it may be subject to Income Tax. The trustees are responsible for paying Income Tax on behalf of the trust at the applicable rates.
- Beneficiaries who receive income from the trust may also be liable for Income Tax, depending on their individual circumstances.
- Capital Gains Tax (CGT):
- When assets held in a trust are sold or transferred, there may be a liability for Capital Gains Tax if there is a gain.
- Trustees are responsible for reporting and paying any Capital Gains Tax due.
- Inheritance Tax (IHT):
- Trusts are subject to Inheritance Tax in certain circumstances, including when assets are transferred into a trust or when certain events occur during the lifetime of the trust.
- The rate of Inheritance Tax depends on various factors, such as the value of the assets in the trust, any exemptions or reliefs available, and the relationship between the settlor of the trust and the beneficiaries.
It’s important to note that this is just a general overview, and the tax treatment of trusts can be complex and subject to change.