pension at 55

[clive1961]

I left the royal mail in 2006 with 27 years service on ill heath with small severance will i still be able to take my pension at 55 ?

clive

[RobertT]

If you recieved 'IHR with a lump sum' then you should also have a deferred Section B? RM pension, which you should be able to take anytime after 55 with the consent of the trustees.

More info can be found by looking at the relevant brochure here:
http://royalmailpensionplan.co.uk/55/pensions-brochures" onclick="window.open(this.href);return false;

[clive1961]

Thanks very much

[alvblade]

Just taken mine last couple of weeks ago, similar to you I left ten years ago with 26 years service. You will need to be in touch with chesterfield a couple of months before your 55th birthday to get it all sorted in time. They will give you three options and you decide which is best for you.

[dav1524]

If you decide to take your pension at say 55yrs & 6months is it back dated to your 55th birthday.

[RobertT]

If you decide to take your pension at say 55yrs & 6months is it back dated to your 55th birthday.

Assuming you’re in the final / average salary scheme, the pension you receive will be based on how much you earned and how long you were in the scheme for, with an actuarial reduction if you're taking any of it before normal retirement age. The amount you actually get will be dependent on the age you choose to take your benefits. If that’s 55 & 6 months then your pension will be based on that!
So, no it will not be backdated.

[dav1524]

If you decide to take your pension at say 55yrs & 6months is it back dated to your 55th birthday.

Assuming you’re in the final / average salary scheme, the pension you receive will be based on how much you earned and how long you were in the scheme for, with an actuarial reduction if you're taking any of it before normal retirement age. The amount you actually get will be dependent on the age you choose to take your benefits. If that’s 55 & 6 months then your pension will be based on that!
So, no it will not be backdated.

Thanks Robert.

[brian f]

hi, i have a small deferred pension, section C- £2500 per annum, will i be able to take all of it next summer when i reach 55 or just a lump sum. can anyone be able to tell me how much it,s worth . thanks

[RobertT]

hi, i have a small deferred pension, section C- £2500 per annum, will i be able to take all of it next summer when i reach 55 or just a lump sum. can anyone be able to tell me how much it,s worth . thanks

When you reach 55 you will be able to take 25% as a tax free lump sum and the rest as a pension for life(index linked) or all of it as a pension. Both would incur a 5% reduction for each year you take it before the normal retirement date, so taking it at 55 would mean a 25% hit on both pension and lump sum.

[brian f]

Thanks for you reply, Robert - as you probably know the government are reforming pensions and from April next year 55 year olds can take pensions early, would this mean no 5% reductions for taking Royal mails pension early .

[RobertT]

People have been able to take their pension at 55 since 2010 and before that it was age 50, infact some people are still exempted by these rules if they have a pension with a protected retirement age or for ill health reasons.

The reforms from April 2015 apply mainly to defined contribution/money purchase pension schemes rather than the RM’s defined benefit plan. So if you have a personal pension or perhaps AVC’s tucked away somewhere you should be able to take all of the money out as cash at 55 with the first 25% being tax free. Or it will also be possible to drawdown the rest over a number of years and possibly pay no tax at all.

This however will not be possible with your RM pension because from next April transfers from final salary schemes and particularly government funded ones (which ours now is) are to be banned. And in the vast majority of cases it wouldn’t be a very good financial decision anyway.

The new rules won’t affect the reduction when taking your pension before normal retirement age I’m afraid, so taking it at 55 would see a 25% hit on yours.

[Happyfeet]

Hi can anyone help i am thinking about claiming my pension at 55 after 13 yrs at RM what figures are we talking about as a lump sum

[brian f]

This however will not be possible with your RM pension because from next April transfers from final salary schemes and particularly government funded ones (which ours now is) are to be banned. And in the vast majority of cases it wouldn’t be a very good financial decision anyway.

Thanks again, Robert i know it's not advisable, can one transfer from Royal Mails defined benefit to a defined contribution scheme from now until April ?

[RobertT]

Hi can anyone help i am thinking about claiming my pension at 55 after 13 yrs at RM what figures are we talking about as a lump sum

There far too many unknowns for anyone to be able to answer that and you’re the only one with access to your pension statement.

But if you want to take both elements of your RM pension, your NRA60 pension & lump sum would be reduced by 25%(5% per year). The NRA65 pension & lump sum you’ve accrued so far would be reduced by 50%.

[RobertT]

This however will not be possible with your RM pension because from next April transfers from final salary schemes and particularly government funded ones (which ours now is) are to be banned. And in the vast majority of cases it wouldn’t be a very good financial decision anyway.

Thanks again, Robert i know it's not advisable, can one transfer from Royal Mails defined benefit to a defined contribution scheme from now until April ?

You can if you want to and you can find more info here: http://royalmailpensionplan.co.uk/111/transferring-out" onclick="window.open(this.href);return false;

Everybody’s circumstances are going to be different so taking it now could be an option, but you will have to answer whether you want a few quid in your hand now or a larger amount over time. And what you intend to live on in your old age.

A lot of these sort of transfers require an IFA to ‘sign it off’ but as most IFA’s know their stuff and realise that in the majority of cases it’s a seriously bad decision that might lead to a mis-selling compensation claim in the future, you may find that they will refuse.

Also taking all the money as cash may reduce the amount you actually receive due to potentially having to pay tax on it. Depending on your total income for the year, you could end up paying 40% tax on some of it.