withdrawing from pension

[arnold cheshire]

i was thinking of withdrawing from pension has ive paid in for well over 20 years and apart from the lum sum its all taxable and the rm are screwing us over with it does anyone have any info for me ? how does it affect your lump sum how does it affect it ? and the pension monthly payments are rubbish anyway

[RobertT]

i was thinking of withdrawing from pension has ive paid in for well over 20 years and apart from the lum sum its all taxable

Pension income is taxable in the same way as your wages, so if your total income is less than the personal tax allowance (currently £10,000) you pay no tax.

and the rm are screwing us over with it does anyone have any info for me ?

The benefits have reduced over the last few years with the change from final to career salary and the more recent changes aswell. But that's nothing new in the world of pensions, similar changes are happening for the police, fire brigade, teachers, etc and many more smaller companies up and down the country and that's been going on for years. It's a bit unrealistic to think the same isn't going to happen to RM pensions in my opinion.

how does it affect your lump sum how does it affect it ? and the pension monthly payments are rubbish anyway

If you pull out of the pension it will be deferred in the same way as if you leave RM, you will build up fewer years and ultimately get less income in retirement and a smaller lump sum.

[arnold cheshire]

i was thinking of withdrawing from pension has ive paid in for well over 20 years and apart from the lum sum its all taxable

Pension income is taxable in the same way as your wages, so if your total income is less than the personal tax allowance (currently £10,000) you pay no tax.

and the rm are screwing us over with it does anyone have any info for me ?

The benefits have reduced over the last few years with the change from final to career salary and the more recent changes aswell. But that's nothing new in the world of pensions, similar changes are happening for the police, fire brigade, teachers, etc and many more smaller companies up and down the country and that's been going on for years. It's a bit unrealistic to think the same isn't going to happen to RM pensions in my opinion.

how does it affect your lump sum how does it affect it ? and the pension monthly payments are rubbish anyway

If you pull out of the pension it will be deferred in the same way as if you leave RM, you will build up fewer years and ultimately get less income in retirement and a smaller lump sum.

i am aware if you leave you will not build up extra years . is state pension included in the pensioners tax allowance ?

[RobertT]

i am aware if you leave you will not build up extra years . is state pension included in the pensioners tax allowance ?

All income is potentially taxable whether it's from a job, savings or a pension including the state pension.
More info on pension tax can be found here:
http://www.hmrc.gov.uk/pensioners/pension.htm" onclick="window.open(this.href);return false;

[TrueBlueTerrier]

Tax on your State Pension

The State Pension counts as taxable income but is paid to you without tax taken off. How you pay the tax due on your State Pension will depend on a number of factors. If your income is low there may be no tax to pay - and you may be able to get other benefits.


Should you be paying tax on your State Pension?

The basic State Pension is based on the National Insurance contributions you've paid or have been credited with during your working life. When you reach State Pension age you no longer pay National Insurance contributions. However, you don't automatically stop paying Income Tax. If your total taxable income from work, private pensions and your State Pension is more than your tax-free personal allowance you're still a taxpayer. You must contact HM Revenue & Customs (HMRC) if you're not already paying tax. If your tax-free allowances are the same as or more than your taxable income, no action is necessary. If you think that you shouldn't be paying tax but are, you may be able to claim a refund..

http://www.hmrc.gov.uk/pensioners/pensi ... ension.htm" onclick="window.open(this.href);return false;

[arnold cheshire]

has anyone with long service opted out of the pension ? i did hear someone with 30 years was thinking of pulling out has this should give a good pension .

[RobertT]

has anyone with long service opted out of the pension ?

Nobody I know has….Personally I have over 20 years service and would not dream of opting out.

i did hear someone with 30 years was thinking of pulling out has this should give a good pension .

Someone who’s approaching retirement with only a year or two left might not notice much difference by opting out, but the longer away from retirement you are, the more opting out will affect you. Although ultimately it will always depend on individual circumstances.

[DB1100]

Next year I have a big expense coming up,can I draw a lump sum out of my pension?,I am already getting my pension as I took it at the age of 55 but I'm just wondering if I can draw a lump sum out of what is left please.

[arnold cheshire]

Next year I have a big expense coming up,can I draw a lump sum out of my pension?,I am already getting my pension as I took it at the age of 55 but I'm just wondering if I can draw a lump sum out of what is left please.

probably not has you are already taking it

[DB1100]

Next year I have a big expense coming up,can I draw a lump sum out of my pension?,I am already getting my pension as I took it at the age of 55 but I'm just wondering if I can draw a lump sum out of what is left please.

probably not has you are already taking it

Thanks.

[RobertT]

Next year I have a big expense coming up,can I draw a lump sum out of my pension?,I am already getting my pension as I took it at the age of 55 but I'm just wondering if I can draw a lump sum out of what is left please.

I’m assuming we’re talking about the final/average salary pension here?
When you took your pension at 55 you were presumably given the option to take a tax free pension commencement lump sum?
That is the only time you are given that option. So whether you took it at the time or not, you can’t take a lump sum out after you’ve started drawing the pension.

[DB1100]

Next year I have a big expense coming up,can I draw a lump sum out of my pension?,I am already getting my pension as I took it at the age of 55 but I'm just wondering if I can draw a lump sum out of what is left please.

I’m assuming we’re talking about the final/average salary pension here?
When you took your pension at 55 you were presumably given the option to take a tax free pension commencement lump sum?
That is the only time you are given that option. So whether you took it at the time or not, you can’t take a lump sum out after you’ve started drawing the pension.

Thanks.

[easter bunny]

I would think very hard about pulling out of the pension scheme given death in service and ill health retirement which the scheme gives .

[N1-22postman]

i was thinking of withdrawing from pension has ive paid in for well over 20 years and apart from the lum sum its all taxable and the rm are screwing us over with it does anyone have any info for me ? how does it affect your lump sum how does it affect it ? and the pension monthly payments are rubbish anyway

What are you going to live off when you stop working? The Royal Mail pension scheme is better than those of rival companies and underwritten by the government. You get tax relief of 20% on your pension payments into the scheme. I have just retired and I do not regret the discipline of paying into the pension scheme and now I am getting the benefits of 40 years contributions. Do you have a spouse and children? They will benefit from your contributions if you predecease them. The state pension age is being extended to 66 and beyond so you will need your royal mail pension to make up the shortfall. My advice is don`t do it.

[NWpostie]

I've been in RM pension scheme from day one since I was 20 years old in fact and glad I stayed in now that I am older and wiser, in hindsight a fortunate thing considering what's happening to annuities and state pension age today. I consider myself very lucky

Simple advice is stay in the pension scheme as it cheaper in the long run.