pension booster

[chickenwittle]

Just done it , free money, silly not to .

not free money though is it?
It's in return for you investing 1%

splitting hairs I know and I agree it's a good deal, but just wouldn't call it free money

Silly post that mate but each to their own I suppose.

How is it a silly post/response?

A post titles pension booster, with responses about it being easy and to find it on the People App... nobody mentions that it's the Lump Sum Booster being referred to.

then to say it's free money.

That's akin to saying the pension is free money because you invest 6% and the business puts in 13.6%.
It's not free.

Pedantic post, perhaps, but silly?

Ok we will settle for pedantic if that makes you feel better.

[RobertT]

How much extra is it per week? Is it about £3?

It's 1% of your pensionable pay, but factoring in tax relief and PSE it's effectively only 0.72%.

If your pensionable pay is £500 per week you'll pay a gross(the amount on your payslip) of £5, but the taxman is paying £1.40 of that, so your net pay will only reduce by £3.60. Plus RM will pay in another 1% / £5.

A £10 uplift to your lump sum for £3.60, why wouldn't you?

[RobertT]

As we cannot take more than 25% of our pensions tax free, I'm guessing that it means more of the pot is left as pension, or am I missing something here?
And does the same apply to the AVCs? Thanks.

The pension and the lump sum are two separate things. You'll accrue an amount of each equal to your length of membership, plus any Lump Sum Booster payments. It won't be possible to use any lump sum to increase the pension, or vice versa.

What's unclear is how they work out the value of the pension, to then calculate out how much of the lump sum, and potentially AVC, is tax free and how much is taxable(should it come to that).
The 20x multiple used for DB pensions won't necessarily apply, because it's a completely different type of scheme!

The options with the AVC are quite confusing!
There's lots of choices depending on when you take or transfer your pension and lump sum benefits. You may be able to take all the AVC as tax free cash alongside the other two elements or you can transfer it out.

In my view it's best suited as a separate pot where you take advantage of PSE and then transfer out for drawdown, particularly if you're already boosting your lump sum. As tax may become an issue as it has with the DBCBS.

The Lump Sum Booster is a no-brainer due to the additional payments from RM. It's got similarities to Bonusplan in terms of it's low contribution level and anyone who's paid into that for 20 years plus, will know it can grow into a tidy sum.

[heapsy]

I'd rather opt out of the whole thing. For what I'll get it isn't worth it.

[robking]

It is absolute madness not to opt in to this, it's like a hidden pay rise.
I've worked it out that my take home pay will be reduced by £3.49pw (I just scrape into the 40% tax band, so I get tax relief at that rate) In return for that my pension fund will be boosted by £11.62pw.