How it works

Once you’ve chosen your provider you usually need to decide on an anticipated bonus rate (ABR). Whether your future income rises or falls depends on the bonus rate you choose.

For example suppose you chose a bonus rate (ABR) of 3%. If at the end of the first year the actual bonus rate declared was 5% then your income would go up. If the declared bonus rate is 3%, your income would stay the same, and if it was lower your income could go down (depending on any guarantees offered by your provider).

In contrast, if you chose a bonus rate (ABR) of 0%, your starting income would be lower, but if the actual bonus rate declared at the end of the first year was 5%, your income would go up even further.

With 0% ABR your income will never fall below the starting level.

Thanks for your letter last week and for all your help in securing my pension. As you predicted Nor...
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