A simple one ... for Robert

[Wullie10]

My RMCPP EE is £31.40 and LSB EE is £5.23 . So what is the over-all pension contribution in one whole year ? I ask I've I have flexiblely accessed pensions rights meaning £10,000 allowance. Thank You.

[mr hil.]

Only 15.2% of your pensionable pay should be used in calculations regarding MPAA allowance, so in your case £79.55 per week or £4136.60 per year.

This includes both yours and RM contributions, as far as I am Aware the Lump sum amounts are not included in the MPAA calculations bit I am only a layman just like the rest of us...

[Wullie10]

I don't quite understand what you mean there. As i read it there's the contribution I make as above , the firms contribution and the tax relief. If it all adds up to less than £10,000 in 24/25 there should be no complications. That's why I thought it would be easy sums for a pension genius like Robert. I'll ring them any way and keep an eye on any future limits. If the worst come to the worst I'd just stop pension payments.. as I've only got a few years at most in the new scheme is hardly worth the trouble.

[RobertT]

Mr Hil is correct.

The MPAA only applies to DC schemes.

The pension element of the RMCPP is classed as a DC, so only contributions into that are assessed for MPAA purposes.

The lump sum(inc booster) is classed as a DB scheme, so money going into that isn't relevant for the MPAA.

[Wullie10]

Not so simple in the end. I accessibly accessed a private pension December last year. It meant my maximum allowance is £10000 a year into a money purchase scheme. I emailed and rang the new pension hot line and and asked would I possibly breach this limit , what would would happen if I did , how would the tax or penalty be collected and they didn't have a clue. I'm still none the wiser . It's quite a technical question that the pension people are not trained to answer. I've sent off a letter required by law to the Royal Mail collective pension but that's as much as I know.. my advice for anyone with a private pension and still contributing to Royal Mail is don't take any draw down from the private pension.

[RobertT]

It's fairly easy to work out how much you're paying into the DC pension section of the RMCPP per year!
Mr Hil has already done it for you!

The maths is:

weekly pay / 6 x 15.2 x 52

In your case:

31.40 / 6 x 15.2 x 52 = £4,136.60

Although for this tax year, it's obviously only going to be around £2k, due to the RMCPP starting half way through.

Your normal contributions are clearly well within the £10k limit. But if you're paying into the new AVC or any other DC pension via another job or your own arrangement, you'll have to add those contributions on too.

The lump sum and booster don't come into it because they're DB!

I'm sure you can find more info on the MPAA, including any potential charges if you breach the limit, on the internet.

[Wullie10]

Cheers. I specifically didn't take out an AVC because of this. I will keep an eye on the Budget as that limit could well be reduced.

[RobertT]

Cheers. I specifically didn't take out an AVC because of this. I will keep an eye on the Budget as that limit could well be reduced.

The MPAA has already gone from £10k, down to £4k and then back up to £10k since 2015/16, and has only been back at £10k for the last 18 months. So hopefully they won't tinker with it again so soon.