Royal mail pension

[anthonyok]

is it really worth it on the newer pension schemes? i have been with royal mail since 2007 but only been on the pension scheme for about 6 years , i got another 10 years to work i pay £20 out of my wages its says 5% to the left of the deduction, anyhow they say when i retire i will get £22 per week ? im hoping perhaps they might let me have a lump sum instead ,makes you think is it worth the bother!!

[RobertT]

By not joining the pension scheme when you first started with RM you’ve made a very poor choice I’m afraid. Based on being full time, no pensionable allowances and being in Section C, you would probably be currently sitting on a guaranteed annual pension of around £3,000 or so. Which isn’t very much, but is lot more than you’re going to get from your Zurich administered Defined Contribution scheme.

From what you’ve said, you’re paying in 5%(£20) of your pay, so RM will also be paying in another 8% - or around £33. However when you consider tax relief and PSE, your contribution is only costing you about £13.60. Which means there’s around £53 going into your pension each week and it’s only costing you £13.60. You’d be mad to turn that down!

There is currently the option to increase your contribution to 6% which will mean RM will also put in 9%. Infact you can put in as much you want, but RM will not put in more than 9% - rising to 10% under their most recent pension proposal.

Being in a DC scheme you have a number of choices as to what to do with the money. Buying an annuity(income for life) is one of them and so is taking it all as cash with probable tax consequences.

RMDCP info: https://www.zurich.co.uk/internet/works ... 716529.pdf" onclick="window.open(this.href);return false;

General DC pension info: https://www.moneyadviceservice.org.uk/e ... on-schemes" onclick="window.open(this.href);return false;