Pension Help

Marke87 · Post by **Marke87** » 23 Jun 2016, 18:57

Hi Guys,

I started working for Royal Mail in Oct 2007 and joined the pension straight away.

I'm a full time postie contributing 6% of the "Pensions Contribution Pay" at £19.77 per week.

A further £2.88 per week goes into the AVC "Bonus Plan"

I'm only 29 and I know its years away from retirement age but giving these figures is it possible to get an idea of what the value of the pension will be?

Thanks in advance

Post by **RobertT** » 24 Jun 2016, 16:05

The first answer that comes to mind is to look at your annual statements.
However as the RMPP is expected to close in 2018 and be replaced by the inferior defined contributions scheme(RMDCP), the projected figures on your statement will be wide of the mark. The numbers quoted on page 4 of your last statement relate to what you’re pension is worth as at 31/3/15, expect another £800-£900 on top of that, taking you up to 2018. And that’s roughly all you’ll get from the RMPP other than inflationary increases each year.

At the moment Section C members have an amount called the Lower Earnings Deduction taken off their yearly wages before their pension payments are deducted, this amounts to £3,328. From 2018 that is not expected to be the case, therefore your 6% contribution is likely to rise to probably around £24 per week. Plus you’re going to get around another £36(9%) per week off RM, giving you a total of about £60 per week going into your RMDCP. It is possible to put in more or less than this but 9% is currently the maximum RM will pay into it.

If you put those figures into a pension calculator it’ll give you rough amounts of what you might get from the RMDCP in the future. There’s plenty of calculators on the net, but you could try this one: https://www.hl.co.uk/pensions/interacti ... calculator" onclick="window.open(this.href);return false;

There are question marks about the future of AVC’s post 2018 as discussed on other threads, but the best case scenario would be that you can continue paying into Bonusplan until you leave RM. So again, use the calculator to find out how much it might be worth. Don't forget the RM contribution too!
The worst case scenario would be that it would close in 2018 and no new money would be allowed to go in.

It’s good that you’re thinking of your pension at your age because lots of people don’t do anything until their 50’s or even 60’s. Personally I’ve been saving quite hard since my late twenties and am now well on track to retire at around 55. If I’d relied solely on the RM pension/s, the earliest would probably be 65.

Marke87 · Post by **Marke87** » 24 Jun 2016, 17:07

Thanks Robert for your Post, it was very helpful.

I opened a SIPP last year with Hargreaves Lansdown so hopefully that will top up my pension.

Roll on 55 eh? :D

11aaa222 · Post by **11aaa222** » 24 Jun 2016, 21:32

RobertT wrote:

It’s good that you’re thinking of your pension at your age because lots of people don’t do anything until their 50’s or even 60’s. Personally I’ve been saving quite hard since my late twenties and am now well on track to retire at around 55. If I’d relied solely on the RM pension/s, the earliest would probably be 65.

RobertT this sound like a plan!! I am in late 20's also.

where shall I start?

I am a member if the section C RM pension plan paying in approx £24 a week. Also been paying into bonusplan of £2.88 a week for several years.

What tips and guidance can you give me as you seem to be very experienced and know what your talking about....

It is wishful thinking retiring at 55 but I spose its a dream and a goal I can work towards, and hopefully can be a realistic aim.

If you don't mind me asking (i know everyone circumstances are different so no one size fits all) what kind of money do you put in each week to your avc that you think is sufficient enough to enable you to retire at this age... as I plan and pray to almighty god everyday to be able to do the same (such is the drain I am finding the work place at the mo)!!!

Post by **RobertT** » 25 Jun 2016, 09:51

My only real advice would be to save as much as you can. It’s frightening how much money you need to fund retirement so the sooner you start, the better off you’re going to be. You might not be able to retire at 55 but whenever you do, the extra money you save now will be putting you in a better position.

I was in my mid 20’s when I first took an interest in my pension and I knew then that I didn’t want to work past 60 at the latest. At the time it was just a distant dream, but I’m now in my late 40’s and have built up a decent sum of money and am well on the way to realising my aim. Infact if I was 55 now I would have enough to retire on.

I’m lucky to have paid my mortgage off and I also don’t have any kids to worry about, so I can afford to save quite heavily. Whenever I’ve had a pay rise I’ve increased my savings accordingly and the same goes for any bonuses along the way – even my Christmas tips. But I started small and have built my regular savings up over a long time so at the moment I save a total of about £500 per month.

Marke87 · Post by **Marke87** » 26 Jun 2016, 10:35

RobertT wrote:The first answer that comes to mind is to look at your annual statements.
However as the RMPP is expected to close in 2018 and be replaced by the inferior defined contributions scheme(RMDCP), the projected figures on your statement will be wide of the mark. The numbers quoted on page 4 of your last statement relate to what you’re pension is worth as at 31/3/15, expect another £800-£900 on top of that, taking you up to 2018. And that’s roughly all you’ll get from the RMPP other than inflationary increases each year.

Will this be the price of what the pension is worth? Or is it a figure you will get yearly?

Post by **RobertT** » 26 Jun 2016, 10:50

It's your NRA60 & NRA65 up to 31/5/15 added together. So if you were taking all of your pension today, without any early payment reductions, that's what you'll get per year.

Poshpost · Post by **Poshpost** » 21 Jul 2016, 16:02

I have asked for and received a Provisional Estimate of Pension Benefits on the same date every year starting in 2013. Between August 2013 -August 2014 the NRA 60 Annual Pension increased by 10% and between August 2014 - August 2015 the NRA 60 increased by 18%. This year when I received the estimate, which includes the period August 2015 to October 2016, a fourteen month span rather than twelve, the increase was only 11%. I am wrong to assume that the increase would become larger the nearer I got to my 60th birthday, which is June 2017.

Post by **RobertT** » 21 Jul 2016, 17:40

Poshpost wrote:I have asked for and received a Provisional Estimate of Pension Benefits on the same date every year starting in 2013. Between August 2013 -August 2014 the NRA 60 Annual Pension increased by 10% and between August 2014 - August 2015 the NRA 60 increased by 18%. This year when I received the estimate, which includes the period August 2015 to October 2016, a fourteen month span rather than twelve, the increase was only 11%. I am wrong to assume that the increase would become larger the nearer I got to my 60th birthday, which is June 2017.

The NRA60 part of your pension was ring fenced in 2008 and went up with wage rises until April 2014 and with inflation since then. Your percentage increases don’t match either! Are you sure you’re not including your NRA65 pension aswell?

Personally my Section C NRA60 pension, not including supplement, increased as follows:

2011 – 2012 = 2.04%
2012 – 2013 = 4.05%
2013 – 2014 = 3.55%
2014 – 2015 = 3.15%

Poshpost · Post by **Poshpost** » 21 Jul 2016, 18:49

My percentages were based on the estimate of the NRA60 Pension after the maximum lump sum was taken and including two supplements (1. Transferred in Pension Supplement 2013/14 £978.92 - 2014/15 £1253.56 - 2015/16 £1515.09 and 2. Pension Supplement £1709.00). Having taken the two supplements out of the calculation I still have the following percentage increases:

August 2013 - August 2014 9%
August 2014 - August 2015 16.5%
August 2015 - October 2016 9%

Post by kh » 21 Jul 2016, 19:15

hi i left the job after 23yrs is there any way i can find what i would get as a pension the now if i took it the now im 50 i no iv got 5yrs to go

Post by **RobertT** » 21 Jul 2016, 20:42

Poshpost wrote:My percentages were based on the estimate of the NRA60 Pension after the maximum lump sum was taken and including two supplements (1. Transferred in Pension Supplement 2013/14 £978.92 - 2014/15 £1253.56 - 2015/16 £1515.09 and 2. Pension Supplement £1709.00). Having taken the two supplements out of the calculation I still have the following percentage increases:

August 2013 - August 2014 9%
August 2014 - August 2015 16.5%
August 2015 - October 2016 9%

I’ve never had a provisional estimate but I’ve used the figures from my annual statement and my percentages are still very different to yours. With my increases after max lump sum and no supplement being:

2011 – 2012 = 10.23%
2012 – 2013 = 4.06%
2013 – 2014 = 5.46%
2014 – 2015 = 3.16%

I’m afraid I don’t know why our %ages are so different, but as the NRA60 pension now just increases with inflation, and as inflation has steadily dropped over the last few years, your pension won’t go up by as much.

Post by **RobertT** » 21 Jul 2016, 20:42

kh wrote:hi i left the job after 23yrs is there any way i can find what i would get as a pension the now if i took it the now im 50 i no iv got 5yrs to go

You should be getting ‘deferred member statements’ each year. I think they’re usually sent out towards the end of the year. Just take 25% off your NRA60 figures and 50% off your NRA65 numbers and that will give you a rough ball park idea of what you might get if you take it all at 55.