Leaving company age 59 & deferring NRA60/NRA65 pensions

[thewayforward]

If I leave Royal Mail at 59 and can afford to,is it preferable to leave the NRA60/65 pension pots in place? I know it is to avoid any actuarial reduction for early payment,but will the pension pots actually increase much over their respective remaining time spans ie 1yr and 6 yrs ? I ask because I will not be able to contribute to them once I have left the company so surely any gains on the pot values will be marginal? Would appreciate any clarification. Thanks.

[heapsy]

Cost of living increases, plus no reduction in benefits. All depends on what you intend to do for money etc. NRA60 would only reduce by around 5% if you took it at 59.

[RobertT]

If I leave Royal Mail at 59 and can afford to,is it preferable to leave the NRA60/65 pension pots in place? I know it is to avoid any actuarial reduction for early payment,but will the pension pots actually increase much over their respective remaining time spans ie 1yr and 6 yrs ? I ask because I will not be able to contribute to them once I have left the company so surely any gains on the pot values will be marginal? Would appreciate any clarification. Thanks.

As a current employee your NRA60 & NRA65 benefits are already effectively deferred and increasing by RPI each year.
You are currently paying into the DBCBS to provide a lump sum when taking those already accrued benefits, and the aim is increases for that will be more than CPI(capped at 4% above).

If you leave RM employment your pre 2018 benefits will continue to increase but by CPI instead, and the DBCBS will continue as above.

For more info see the RMPP website.

*RPI is generally higher than CPI.

It's usually best to take your NRA60 & NRA65 benefits at those ages, because they will be reduced if taken early and there's no gain to deferring them afterwards.

So the question really is whether it's better to take your benefits at NRA, or take them early and have that money for longer, but incur the 5% per year reduction.

There'll be people on these forums that say a lot of posties die young and I'm sure we all know of some who have. But the figures in the annual reports suggest the life span of postmen is actually higher than the national average. While postwomen hit the average!

It's up to you to do your own maths taking into account your own situation, lifestyle, aspirations, etc. But in general and based on average life expectancies, it's better to take your RM pension at NRA, regardless of when you actually leave RM employment.