extra pension

the mad woman · Post by **the mad woman** » 19 Nov 2016, 20:13

if you are over 60 and taking your royal mail pension can you pay extra into the pension we will get at 65 if so how much are you allowed to pay in

Post by **RobertT** » 20 Nov 2016, 06:32

You are not allowed to pay more than the 6% basic contribution into the RMPP itself. So any addition money you want to save into pensions would have to go into either AVC’s or a separate private pension away from Royal Mail.

The total amount you can invest into pensions as a whole is 100% of your income, up to a limit of £40k.

Post by **baldrick** » 20 Nov 2016, 08:16

Robert T, we used to be able to buy 'added years' for our RM pension. I forget what it was called, but I paid about £40 pw extra towards my pension after I reached 40, and bought an additional eight years to give me the full 40 years for the maximum pension at 60.
Can you not do that now?

Post by **RobertT** » 20 Nov 2016, 08:38

It was called Addplan but it was stopped when the final salary scheme closed in 2008. Although anybody already paying in beforehand was and still is, allowed to continue with it. Info: http://www.royalmailpensionplan.co.uk/s ... nsion-avcs" onclick="window.open(this.href);return false;

We don’t yet know how the probable closure of the RMPP will affect those who are still buying added years after 2018.

Post by **baldrick** » 21 Nov 2016, 08:44

That's bad. Although it cost me quite a lot, it made a big difference to the pension I got.

Post by **fly-catchers** » 21 Nov 2016, 15:04

baldrick wrote:That's bad. Although it cost me quite a lot, it made a big difference to the pension I got.

I have gone for the Added Years AVC as well. Turning my 30 years at RM at 60 into 40 years. So I still have 30 years at the Final Salary rate. I wonder how many people across the Country took it out? You are the first person I have seen who also had it..

Post by **baldrick** » 21 Nov 2016, 17:40

I only took it out because initially I paid into the Equitable Life AVC which was promising a better return. When that crashed we were given the option of buying extra years with the remaining Equitable funds being transferred to the RM Addplan scheme. I think I initially got a couple of added years with the transferred funds, then opted to buy enough years to make my total years to 40 including the 32 actually served.
I think when I started the payment was about £25 pw on top of whatever it was I had to pay into the RM Pension scheme. It rose over 20 years to about £40 pw by the time I reached 60. Which with the £25 I had to pay in was quite a big chunk of my pay. I covered the cost by usually working Sunday OT.

It did make a big difference to my pension and lump sum, increasing them by about 20% so I think it was worth it.
I don't know any of my colleagues who took up the scheme. I think there were different reasons, they didn't have enough information about it, or they couldn't afford the payments, or they didn't want to be tied into it - iirc once you signed up for it you couldn't vary the amount paid or opt out as you could with the AVCs, so that may have put off people who didn't know if they would be able to afford it in the future.
I thought it was a better return and a safer investment than the alternative AVCs, especially after the experience with Equitable Life, and in a way I thought it was good that I was tied in so wouldn't be tempted to opt out.
It did work out well for me and I think you have made the right decision fly-catchers.

Post by **fly-catchers** » 21 Nov 2016, 18:27

And I too got burnt by the Equitable Life AVC crash! Serves to remind you that no matter how well regarded and established a financial organisation is it can still fail!