Delay taking your Nra65 and cash balance at age 65

[rkss]

One of my colleagues said he's going to delay taking his Nra65 an that u ou don't lose out as the money is added to your pension, I checked this with a call to pensions today and they confirmed this. Also I am assuming then that any inflationary increases will still apply to the pension and the cash balance.
Has anyone delayed taking thier s?

[RobertT]

You'll get more money added to your DBCBS pot, but your NRA65 pension won't be back dated to 65 when you do decide to take it.

The pension will continue to increase with inflation until you take that, and beyond.

The annual discretionary increases to the DBCBS will continue until you take that. They are targetted to be above CPI, but there's no guarantee they will be.

Bear in mind that the new CDC pension will replace all existing RM schemes, when that comes in, which is finally expected to be sometime in 2024. So there's only a fairly short time to maximise your DBCBS, if that's your intention.

[rkss]

Hi intention was to avoid opening up a Sipp if I have to, strange though the guy said I wouldn't lose any money by not taking Nra65 he said it would be added to the pension.

[RobertT]

He probably means you'll continue to build up your DBCBS.

In practice, you would have to weigh up whether you'll be getting more DBCBS than you'd be losing in pension. Bearing in mind when you do take the DBCBS, it's likely to be fairly heavily taxed.

[heapsy]

One of my colleagues said he's going to delay taking his Nra65 an that u ou don't lose out as the money is added to your pension, I checked this with a call to pensions today and they confirmed this. Also I am assuming then that any inflationary increases will still apply to the pension and the cash balance.
Has anyone delayed taking thier s?

There's no advantage to delaying taking your pension. It doesn't increase any more than it would do if you had taken it. You will lose the pension you didn't take, as it is not added or back dated.

[RobertT]

When you take your NRA65 pension, you also have to take the DBCBS, unless you've already transferred that out.

If you don't take your NRA65 pension at 65 and you're still working for RM, you can continue to pay into the DBCBS. But the pension won't be backdated to 65, when you do take it.

It's perfectly possible there could be more going into your DBCBS pot, than you'd be drawing in pension, during that period of deferment.
So in theory, not taking your NRA65 at 65 could be the better choice. But as the DBCBS has become quite tax inefficient, the amount you lose in tax would also need to be factored in to the overall sums.

You could also continue to pay AVC's and take advantage of the tax breaks from doing that.

Once the RMPP closes completely and payments into the DBCBS stop, or you leave RM, there would be absolutely no benefit in deferring any NRA65 benefits past 65.

There's no benefit to deferring NRA60 benefits past 60, under any circumstances.

[rkss]

Ok thanks I think for me I will have to see what options are available for me as what to do with the Dbcbs and Avc at age 65, 2 years time as I plan to work till 66.5(state pension is then payable)
Hopefully I can invest somewhere I can drawdown as and when but if possible earn interest on the balance without paying excessive amounts in fees.... Too much to ask I guess.