DBCBS transfer to SIPP

[fluxburner]

Ex Royal mail, left a year ago. 57 years old.
I was considering transferring my DBCBS into my SIPP, (I already did this with the RMDCP) with no issues.
Are there any benefits I would lose in doing this or hidden tripwires that I am not seeing?
Getting as many opinions as I can.
It's not a lot, around £21000 if I recall.

Best regards

[RobertT]

It sounds like you were in section F of the RMPP, so you were in the RMDCP for at least 5 years and then joined the DBCBS sometime after April 2018?

Your options are slightly different to section A, B & C members because you won't have any Age60 or Age65 benefits to take the DBCBS with.
You have 2 options:

1. Leave it where it is until you decide to take your cash.

It can't go down in value and will continue to increase with discretionary annual increases, which so far have hit the stated aim of CPI or higher.
It has an NRA of 65 so if you take it before then it will be reduced. The calculator on the RMPP website suggests a 1.4% per year reduction if taken before NRA, compared to it's value 'today'.
You'll only be able to take it in full as a cash lump sum, with 25% being tax free and the remainder classed as income and taxed accordingly.

2. Transfer it to a SIPP

As it's less than £30k there shouldn't be any IFA approval needed.
As far as I know a transfer would be at face value(no early payment reductions), but will obviously then be subject to the charges and fluctuations associated with your SIPP and it's investments.
You can buy an annuity or draw it down over a period of time, which maybe more tax efficient than taking it in option 1, depending on other income, etc.

More info can be found in the relevant section of the RMPP website.

[Postie Malone]

I would also consider waiting until after the annual increase is applied in April.

It may also be worth waiting until after the situation with the fund surplus is resolved. There is always a possibility that some of that surplus will find its way to scheme members - which you won't be if you transfer your pot out to a SIPP.

[roadrunner bill]

Hi Robert..

you say you pay 1.4 % per year before nra 65.... on the cash balance.... which is 2018 to 2024...

Mine is 28k.... so would that mean I'd lose 14 % total if I took my cash balance at 55 years old ?

Thank you.

[RobertT]

you say you pay 1.4 % per year before nra 65.... on the cash balance.... which is 2018 to 2024...

Mine is 28k.... so would that mean I'd lose 14 % total if I took my cash balance at 55 years old ?

The calculator seems to suggest that!

Why not play around with it and put in a few different ages to see how much your pot might grow by the time your 55-65 or how much you might lose if you take it early.

For any section A, B or C members only wanting to work out their DBCBS, just choose section F.

https://www.royalmailpensionplan.co.uk/

[fluxburner]

Thanks for the replys, will think on it.

Regards