Pension Salary Exchange

[arnold cheshire]

Just looking at my wage slip, I see our wage rise is not came through yet.

Wage (rounded) £395. Pension payment, £23. Tax, £57. NI, £37. So how much NI will I save on £23 a week ?

Now My £23 pension payment is based on my bare wage. If I done loads of OT then that would go up. Do I pay the extra or will Royal Mail pay the extra.

Also a pay rise of say 3% on £405 will be a rise of £12.15. the same wage rise on £385 would be £11.55. 60p a week. Over the year £31.20. Over the life time of your Royal Mail career, could add up to a tidy little amount.


Again the big question, HOW MUCH WILL WE BE BETTER OFF A WEEK.

gg.

my wage £395 (rounded) tax 37 NI 26 bit of a difference my pension 21

[RobertT]

Just looking at my wage slip, I see our wage rise is not came through yet.

We get the pay rise next week on Friday 24th April.

Wage (rounded) £395. Pension payment, £23. Tax, £57. NI, £37. So how much NI will I save on £23 a week ?

I’m no expert on NI and am quite happy to be corrected but based on the current NI rate for RMPP members of 10.6% and your £23 I make it £2.43. On 12% it would be £2.76.

Now My £23 pension payment is based on my bare wage. If I done loads of OT then that would go up. Do I pay the extra or will Royal Mail pay the extra.

All of your pension payment in any one week would be included in PSE, including any AVC’s you may pay.

Also a pay rise of say 3% on £405 will be a rise of £12.15. the same wage rise on £385 would be £11.55. 60p a week. Over the year £31.20. Over the life time of your Royal Mail career, could add up to a tidy little amount.

Your current basic weekly pay is £395(rounded), under PSE it will still be £395 (not counting next weeks rise) it’s just that RM will be paying your pension contribution for you. You will still be earning £395 and any future pay rises will be based on the larger amount.
More info: http://www.myroyalmail.com/node/6796" onclick="window.open(this.href);return false;

Again the big question, HOW MUCH WILL WE BE BETTER OFF A WEEK.

That will vary from person to person depending on their exact wages and pension arrangements, a RMPP member who pays AVC’s for example, will save more because they pay more into their pension.

You also have to bare in mind the main reason PSE is being introduced - NI rates are going up for both members of the RMPP and for RM itself in April 2016. This scheme will help to negate those increases for both parties. It will help keep more of our money in our pockets and it will help to keep RM profitable. It may even help to keep the CARE pension open for a bit longer. I can understand peoples misgivings, but it'll be a good thing for most.

[gg]

Thanks Robert for putting it in English.


Now where's the "thanks" button.

[gg]

Just looking at my wage slip, I see our wage rise is not came through yet.

Wage (rounded) £395. Pension payment, £23. Tax, £57. NI, £37. So how much NI will I save on £23 a week ?

Now My £23 pension payment is based on my bare wage. If I done loads of OT then that would go up. Do I pay the extra or will Royal Mail pay the extra.

Also a pay rise of say 3% on £405 will be a rise of £12.15. the same wage rise on £385 would be £11.55. 60p a week. Over the year £31.20. Over the life time of your Royal Mail career, could add up to a tidy little amount.


Again the big question, HOW MUCH WILL WE BE BETTER OFF A WEEK.

gg.

my wage £395 (rounded) tax 37 NI 26 bit of a difference my pension 21

I'm married and 45. Don't know if that would make a big difference. Your saving over £1500 on both tax and NI on what I pay. Then again I get a shift allowance of £80.26 per week.

gg

[arnold cheshire]

Just looking at my wage slip, I see our wage rise is not came through yet.

Wage (rounded) £395. Pension payment, £23. Tax, £57. NI, £37. So how much NI will I save on £23 a week ?

Now My £23 pension payment is based on my bare wage. If I done loads of OT then that would go up. Do I pay the extra or will Royal Mail pay the extra.

Also a pay rise of say 3% on £405 will be a rise of £12.15. the same wage rise on £385 would be £11.55. 60p a week. Over the year £31.20. Over the life time of your Royal Mail career, could add up to a tidy little amount.


Again the big question, HOW MUCH WILL WE BE BETTER OFF A WEEK.

gg.

my wage £395 (rounded) tax 37 NI 26 bit of a difference my pension 21

i thought so

I'm married and 45. Don't know if that would make a big difference. Your saving over £1500 on both tax and NI on what I pay. Then again I get a shift allowance of £80.26 per week.

gg

[nataddick]

Just out of curiosity, I thought I would try to validate the NI savings for a Section C Member on £24,000 p.a. shown in LTB 238/15 which is :-

'The examples below have been prepared by the union’s pension advisors First Actuarial and are based on before tax earnings of £24,000 a year.'

Scheme / Member

RMPP Section C
£132

I got to understand how to work this particular example through:-

From the £24,000 p.a. I deducted the Lower Earnings Deduction of £3,328 p.a. to arrive at the 'Pensionable Pay' which is £20,672.

The normal pension contributions for a Section C member would be 6% of Pensionable Pay of £20,672 which is £1,240 p.a. This is the amount that, under the new PSE scheme, would no longer be subject to N.I. At the current N.I.rate of 10.6% this would save £132 p.a (rounded up)

As I mentioned in an earlier post, this wonderful new iniative is long overdue. My wife has had the same deal with her employers for over 3 years and you have to ask why has it taken so long to adopt it - given we could have saved £132 p.a. for the last 3 years ! I guess the Privatisation and the looming hike in N.I. contributions, as a result of the end of contracting out, has finally focused the minds of the finance bods.

[gg]

So it works out at about £2.50 a week saving. Might just up my credit union to £12.50 a week.

[RobertT]

As I mentioned in an earlier post, this wonderful new iniative is long overdue. My wife has had the same deal with her employers for over 3 years and you have to ask why has it taken so long to adopt it - given we could have saved £132 p.a. for the last 3 years ! I guess the Privatisation and the looming hike in N.I. contributions, as a result of the end of contracting out, has finally focused the minds of the finance bods.

I think it was actually first introduced by HMRC in the late 1990's, so probably more like 15 lost years!

So it works out at about £2.50 a week saving. Might just up my credit union to £12.50 a week.

Personally I'm planning on upping my AVC's a bit, that'll have the effect of recycling the savings at no extra cost, while saving that little bit more in tax and NI aswell.

[arnold cheshire]

As I mentioned in an earlier post, this wonderful new iniative is long overdue. My wife has had the same deal with her employers for over 3 years and you have to ask why has it taken so long to adopt it - given we could have saved £132 p.a. for the last 3 years ! I guess the Privatisation and the looming hike in N.I. contributions, as a result of the end of contracting out, has finally focused the minds of the finance bods.

I think it was actually first introduced by HMRC in the late 1990's, so probably more like 15 lost years!

So it works out at about £2.50 a week saving. Might just up my credit union to £12.50 a week.

Personally I'm planning on upping my AVC's a bit, that'll have the effect of recycling the savings at no extra cost, while saving that little bit more in tax and NI aswell.

how do up AVC ?

[RobertT]

As I mentioned in an earlier post, this wonderful new iniative is long overdue. My wife has had the same deal with her employers for over 3 years and you have to ask why has it taken so long to adopt it - given we could have saved £132 p.a. for the last 3 years ! I guess the Privatisation and the looming hike in N.I. contributions, as a result of the end of contracting out, has finally focused the minds of the finance bods.

I think it was actually first introduced by HMRC in the late 1990's, so probably more like 15 lost years!

So it works out at about £2.50 a week saving. Might just up my credit union to £12.50 a week.

Personally I'm planning on upping my AVC's a bit, that'll have the effect of recycling the savings at no extra cost, while saving that little bit more in tax and NI aswell.

how do up AVC ?

I get in touch with the pension centre in Chesterfield and tell them I want to increase the payments into my Flexiplan.

[arnold cheshire]

As I mentioned in an earlier post, this wonderful new iniative is long overdue. My wife has had the same deal with her employers for over 3 years and you have to ask why has it taken so long to adopt it - given we could have saved £132 p.a. for the last 3 years ! I guess the Privatisation and the looming hike in N.I. contributions, as a result of the end of contracting out, has finally focused the minds of the finance bods.

I think it was actually first introduced by HMRC in the late 1990's, so probably more like 15 lost years!

So it works out at about £2.50 a week saving. Might just up my credit union to £12.50 a week.

Personally I'm planning on upping my AVC's a bit, that'll have the effect of recycling the savings at no extra cost, while saving that little bit more in tax and NI aswell.

how do up AVC ?

I get in touch with the pension centre in Chesterfield and tell them I want to increase the payments into my Flexiplan.

does this apply to people with over 25 yrs service ? whats a flexiplan ??

[gg]

I was told that you would be better putting your money in a high interest account than use AVC's. That was from the pension guy from the CWU.

[RobertT]

As I mentioned in an earlier post, this wonderful new iniative is long overdue. My wife has had the same deal with her employers for over 3 years and you have to ask why has it taken so long to adopt it - given we could have saved £132 p.a. for the last 3 years ! I guess the Privatisation and the looming hike in N.I. contributions, as a result of the end of contracting out, has finally focused the minds of the finance bods.

I think it was actually first introduced by HMRC in the late 1990's, so probably more like 15 lost years!

So it works out at about £2.50 a week saving. Might just up my credit union to £12.50 a week.

Personally I'm planning on upping my AVC's a bit, that'll have the effect of recycling the savings at no extra cost, while saving that little bit more in tax and NI aswell.

how do up AVC ?

I get in touch with the pension centre in Chesterfield and tell them I want to increase the payments into my Flexiplan.

does this apply to people with over 25 yrs service ? whats a flexiplan ??

More info here:
http://royalmailpensionplan.co.uk/6/avcs" onclick="window.open(this.href);return false;

[RobertT]

I was told that you would be better putting your money in a high interest account than use AVC's. That was from the pension guy from the CWU.

My AVC's are invested in the growth fund, take a look at the rates over the last few years: http://royalmailpensionplan.co.uk/115/avc-documents" onclick="window.open(this.href);return false; - 9.15%
over the last year, 40.24% over the last 3 years.

If you can get a high street account that pays more than that, good luck to you.

Factor in tax relief and the new NI savings via PSE and I think it's fair to say your CWU guy is clueless.

[gg]

I was told that you would be better putting your money in a high interest account than use AVC's. That was from the pension guy from the CWU.

My AVC's are invested in the growth fund, take a look at the rates over the last few years: http://royalmailpensionplan.co.uk/115/avc-documents" onclick="window.open(this.href);return false; - 9.15%
over the last year, 40.24% over the last 3 years.

If you can get a high street account that pays more than that, good luck to you.

Factor in tax relief and the new NI savings via PSE and I think it's fair to say your CWU guy is clueless.

That was about 8 years ago, so things might have changed. I think I put a guy off in my work by telling him that. I'll tell him to get expert advice on the matter. Pensions is something you need to get right 100%.

gg