Lump Sum

[ariadne]

RMSPS NRA60 £822 a year and £5480 max tax free lump sum.

RMPP NRA65 £1832 a year and £12216 max tax free lump sum.

DBCBS £27346.

AVC’s £11000.

Bonus plan £1200.

Two questions really.

Firstly am I missing RMSP NRA65.

Secondly what would be the maximum lump sum I could get tax free.

Section C I started in 2008. I am sixty in November.

It’s making my head hurt.

[RobertT]

Firstly am I missing RMSPS NRA65.

It looks like it.
That relates to the two years of average salary pension from 2010 to 2012.

Secondly what would be the maximum lump sum I could get tax free.

Your quotes are to take maximum lump sum from your main scheme benefits, therefore the DBCBS and AVC's totalling nearly £40k would be paid as a UFPLS, meaning 25% of that will also be tax free.

Going by your figures, that's a total of £27,582 tax free and £29,660 taxable. Plus the missing two years!

Assuming you're still working, as a minimum you'll pay 20% tax on that - £5,932.
But when you factor in your other income, you may pay end up paying 40% on some of it?


What do your figures look like if you don't take any lump sum from your main scheme benefits and use the AVC's and DBCBS to fund the tax free cash instead?
And how beneficial would it be to leave your NR65 until 65, considering that represents the majority of your benefits?

[ariadne]

Thank you Robert for your help.

RMPP NRA65 £2348.59 or £1832.47 and £12216.49

RMSPS NRA60 £1079.48 or £822.05 and £5480.41

RMSPS NRA65 £589.04 or £449.18 and £2994.56

Ideally I want to finish working. I have a good tax free pension from elsewhere and my plan is to take a break and maybe pick up a bit of work later as and when required.

[NWpostie]

Thank you Robert for your help.

RMPP NRA65 £2348.59 or £1832.47 and £12216.49

RMSPS NRA60 £1079.48 or £822.05 and £5480.41

RMSPS NRA65 £589.04 or £449.18 and £2994.56

Ideally I want to finish working. I have a good tax free pension from elsewhere and my plan is to take a break and maybe pick up a bit of work later as and when required.

So that works out at about £334 a month ?

[ariadne]

So by my reckoning I could end up with around £50000 cash and £258 a month.
I added the numbers Robert gave me, £27k and £29k then took away the tax £6k.
I added the smaller pension figures together and divided that total by twelve.

[NWpostie]

It's shockingly small.

[ariadne]

NWPostie you’re not wrong.
18 years and without any other income I would be working to 67.
Pensions should be taught at school because by the time you start to think about them it’s too late.

[NWpostie]

NWPostie you’re not wrong.
18 years and without any other income I would be working to 67.
Pensions should be taught at school because by the time you start to think about them it’s too late.

I agree, young people don't always look beyond next week, there are exceptions like me and I try to pass on the same message younger people.


I've been in a Royal Mail pension scheme since I was 20 years old now 56, I've also paid into a Flexiplan and Bonusplan to boost my lump sum and preserve as much of my original pension as I can.

[RobertT]

NWPostie you’re not wrong.
18 years and without any other income I would be working to 67.
Pensions should be taught at school because by the time you start to think about them it’s too late.

I agree, young people don't always look beyond next week,

A lot of older people don't either.

[NWpostie]

NWPostie you’re not wrong.
18 years and without any other income I would be working to 67.
Pensions should be taught at school because by the time you start to think about them it’s too late.

I agree, young people don't always look beyond next week,

A lot of older people don't either.

There's that too unfortunately, probably stemming from ignorance from their youth and putting their head in the sands in spite of best advice, some people just won't listen to sound financial advice.

[ariadne]

Does this seem right ?

RMPP NRA65 Option 2. £1832.47pa + £12216.49 tax free cash.

RMSPS NRA60 Option 2. £822.05pa + £5480.81 tax free cash.

RMSPS NRA65 Option 2. £449.18pa + £2994.56 tax free cash.

By my reckoning that would give me £258.60 per month with £20691.46 tax free cash.

If correct this would keep me going for a year or so.

I still have a cash balance of £27753.76 and an AVC balance of £15172.48, a total of £42926.24 which I would leave until I decide how best to use it.

TIA

[Postie Malone]

Does this seem right ?

RMPP NRA65 Option 2. £1832.47pa + £12216.49 tax free cash.

RMSPS NRA60 Option 2. £822.05pa + £5480.81 tax free cash.

RMSPS NRA65 Option 2. £449.18pa + £2994.56 tax free cash.

By my reckoning that would give me £258.60 per month with £20691.46 tax free cash.

If correct this would keep me going for a year or so.

I still have a cash balance of £27753.76 and an AVC balance of £15172.48, a total of £42926.24 which I would leave until I decide how best to use it.

TIA

If you are planning on not working, then you may as well get money out of your cash balance and avc tax free using your personal allowance over a few years. You could then feed that into a stocks and shares ISA in similar investments if you have no plans for it yet.

[freespeech]

Does this seem right ?

RMPP NRA65 Option 2. £1832.47pa + £12216.49 tax free cash.

RMSPS NRA60 Option 2. £822.05pa + £5480.81 tax free cash.

RMSPS NRA65 Option 2. £449.18pa + £2994.56 tax free cash.

By my reckoning that would give me £258.60 per month with £20691.46 tax free cash.

If correct this would keep me going for a year or so.

I still have a cash balance of £27753.76 and an AVC balance of £15172.48, a total of £42926.24 which I would leave until I decide how best to use it.

TIA

If you are planning on not working, then you may as well get money out of your cash balance and avc tax free using your personal allowance over a few years. You could then feed that into a stocks and shares ISA in similar investments if you have no plans for it yet.

How do you get the cash balance and AVC out in stages? Surely it would need converting first?

[ariadne]

If the figures are correct then the plan is to take NRA60 next month when I’m 60 simply as there is no point deferring it. I want to work until around May next year and then take the NRA65 as required.

In between I will take advice on what to do with the cash balance and AVC money.

[NWpostie]

If the figures are correct then the plan is to take NRA60 next month when I’m 60 simply as there is no point deferring it. I want to work until around May next year and then take the NRA65 as required.

In between I will take advice on what to do with the cash balance and AVC money.

So essentially taking both benefits on either side of two tax years ?