Hi, I had two small periods of employment with RM and each year I get two section C valuations. One of them shows an annual pension of £18.52 + annual pension supplement £5.17 + pension increase amount £11.21 = current value of annual pension £34.90.
I would like to know how to calculate the small pot value please?
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Section C small pot calculator
-
robking
- Posts: 236
- Joined: 19 Dec 2020, 12:14
- Gender: Male
Re: Section C small pot calculator
Before 2018 it was 1/60th of your pensionable pay (not your actual pay) per year. This was put in a pot and revalued in line with inflation up to a maximum of 5%.
So for example if your pensionable pay was £15,000 per year and you worked exactly one year you would have an annual pension of £250 which is 1/60th of £15,000.
If someone worked less than a year, as you have, they can break it down further by first dividing their pensionable pay by 60 then dividing again by 365 and then multiplying by the number of actual days they worked, so in the above example if they only worked 30 days their annual pension would amount to £20.55. (15000/60 =250/365=0.685x30=20.55)
In your case the £18.52 is the pension you accrued, the £11.21 is the increase in it due to inflation and the £5.17 is an extra amount that people can get if they claim their pension before they reach the state pension age as long as they don't still work for Royal mail and it stops once their state pension does become payable.
Your pension is so small that when you come to claim it they will offer you a tax free cash lump sum known as a Trivial Commutation instead.
So for example if your pensionable pay was £15,000 per year and you worked exactly one year you would have an annual pension of £250 which is 1/60th of £15,000.
If someone worked less than a year, as you have, they can break it down further by first dividing their pensionable pay by 60 then dividing again by 365 and then multiplying by the number of actual days they worked, so in the above example if they only worked 30 days their annual pension would amount to £20.55. (15000/60 =250/365=0.685x30=20.55)
In your case the £18.52 is the pension you accrued, the £11.21 is the increase in it due to inflation and the £5.17 is an extra amount that people can get if they claim their pension before they reach the state pension age as long as they don't still work for Royal mail and it stops once their state pension does become payable.
Your pension is so small that when you come to claim it they will offer you a tax free cash lump sum known as a Trivial Commutation instead.