Paying more pension

Sputters2017 · Post by **Sputters2017** » 23 Jul 2018, 14:42

Does anyone know. is it possible apart from avc to pay more into the royal mail pension and for rm to contribute more .

Post by **RobertT** » 23 Jul 2018, 15:27

The simple answer is no!

You used to be able to buy added years but that was stopped for anyone new wanting to do it in 2008 and for those who already were, when the RMPP closed to future accrual in March of this year.

Your only option is to pay AVC's(you do get extra off RM with Bonusplan) or open a personal pension/SIPP.

The plan for the CDC scheme is that we can pay an extra 1% which will be matched by RM, but that will go towards a bigger lump sum rather than a bigger pension.

Sputters2017 · Post by **Sputters2017** » 23 Jul 2018, 15:41

Thanks it was because i had my pension forcast and £2000 pa doesn't seem much for 18 years. I do avcs to £25 a week but they are a very low pay out too .

twoloops · Post by **twoloops** » 23 Jul 2018, 15:56

Is that right £166.66 a month for 18 years ..... shocking

Post by **RobertT** » 23 Jul 2018, 16:51

Sputters2017 wrote:Thanks it was because i had my pension forcast and £2000 pa doesn't seem much for 18 years.

I'm guessing you're either part time or you're forecast is based on taking your pension/s before normal retirement age/s? In which case you'll be hit with a 5% per year reduction. So if you're taking all your pension at 55 for example, your NRA60 will be reduced by 25% and your NRA65 by 50%.

I do avcs to £25 a week but they are a very low pay out too .

The normal use of AVC's to to fund the tax free lump sum so you don't have to give up as much, or any of your pension to get one. But the statements we recently got, give figures based on buying an annuity(income for life), which don't offer very good value for money.
They give annuity figures based on your selected retirement age and providing a index linked income for life, plus a spouses pension on your death. As a rough guide the rate of providing that at age 60 is about 3%, which means for every £10,000 in your pot, you'll get a starting pension amount of £300 per year.
You also have the opportunity to shop around when buying an annuity, you don't have to go with Zurich!

Where you choose to invest your AVC money will obviously also affect its value.