Should I take my pension now

jcmm · Post by **jcmm** » 11 Oct 2018, 17:15

I'm not really savvy on this pension thing
I have work for Royal Mail now for 18 years I am 2 years over 60 and have not taken any pension I want to retire at 66 is it better for me to take my 60 pension now or leave it as I want to increase my savings fund before I actually do retire

heapsy · Post by **heapsy** » 11 Oct 2018, 17:26

jcmm wrote:I'm not really savvy on this pension thing
I have work for Royal Mail now for 18 years I am 2 years over 60 and have not taken any pension I want to retire at 66 is it better for me to take my 60 pension now or leave it as I want to increase my savings fund before I actually do retire

Should have taken your NRA60 when you reached 60. You've lost money. Always take your pension when it is due, no later. If you are still working then maybe leave the NRA65 where it is. Lot of debate on here whether it is worth taking it early with reduction or leave until the correct age. Really depends on what else you might have regards savings, investments etc. Remember, think about when you are retired, not NOW. Taking your pension early sounds great, but what about when you are retired and no longer receiving your regular wage? BTW, taking your NRA60 at 60 was not early payments, it was designed to pay out then. Crack on and set the ball rolling to claim it, RM do not remind you to do so, why would they, they've saved themselves some money.

Post by **RobertT** » 11 Oct 2018, 18:19

jcmm wrote:I'm not really savvy on this pension thing
I have work for Royal Mail now for 18 years I am 2 years over 60 and have not taken any pension I want to retire at 66 is it better for me to take my 60 pension now or leave it as I want to increase my savings fund before I actually do retire

The optimum time to take your RM pension/s is at their NRA. Taking them early means taking a reduction. But deferring them after NRA doesn't get you any more pension, other than inflationary increases, but you get that in payment anyway.

If you're still working you'll almost certainly have to pay tax on it, but by not taking it at all you're giving away a substantial amount of money.

Taking it at NRA and putting it into a savings account, is much better than not taking it at all!

The pensions dept. should have got in touch with you 3-4 months before 60 to set the ball rolling, I assume you chose to ignore their correspondence?

There's lots of info about your options on the pensions website: https://www.royalmailpensionplan.co.uk/" onclick="window.open(this.href);return false;

Post by **baldrick** » 12 Oct 2018, 07:15

jcmm wrote: I want to increase my savings fund before I actually do retire

You should really have taken your pension at 60 and put it in a savings account. Although savings accounts aren't paying much interest, you would still be increasing your savings.
I took my RM pension at 60, and continued to work until I was 62. Having my wage plus my pension meant I was able to save, which I hadn't done before. If you have a mortgage or other debts use the money to pay them off.

BeamishStout · Post by **BeamishStout** » 13 Oct 2018, 09:31

As all other posters have stated the answer is an unequivocal YES TAKE IT NOW (the NRA 60 element)

From RM Pensions themselves, contained in one of their nutshell booklets

https://www.royalmailpensionplan.co.uk/ ... 8_web3.pdf
p.16

Your Age60 benefits are unlikely to grow significantly if you don’t take them at 60. If you choose to wait to take your Age60 benefits, your payments won’t be backdated to when you were 60, so you won’t get the benefit of that money.

Post by **RobertT** » 13 Oct 2018, 10:53

I think it's a sad state of affairs when something like this happens.

Pensions aren't the easiest of things to understand, especially with all the various schemes and sections, etc. But there's lots of information out there to help you make the right choice at the right time.

Take a look at the sticky at the top of the pensions forum giving you the various website addresses of the RMPP, RMSPS & RMDCP. Or click here.

Take time to explore the websites and read whatever applies to you as many times as it takes to understand your pension. Ask questions via the helplines, knowledgeable family and friends or via this site, but bear in mind that can only ever really be generalised advice.

If you want advice based on your specific situation(in practice everyone will be a bit different), visit an IFA. They'll be a cost to it, but the advice you receive should be relevant to your circumstances and in the long run could save you a lot of money.

Make sure you do the right thing for you and your family and don't just do what your mate at work does. Because they might be in a different situation to you without you realising, and could be making the wrong choice anyway.

The whole point of a pension is that you pay into it while you're working, so you've got enough to live on when you want to stop work.
If your RM benefits aren't likely to be enough, look into saving more if possible. That could be done via AVC's, personal pensions or ISA's, etc. The earlier you start, the longer your money will be invested for, and the less you'll need to pay in.

Try and take an interest in your retirement as early as possible – it's not just something you do when you're old!

heapsy · Post by **heapsy** » 13 Oct 2018, 12:19

Good posts from Beamish and Rob. It seems people just don't get what they are told. Sadly, another issue is that people do not "ring fence" money for retirement. That is, to commit a certain amount per week / month regardless. It gets overlooked until it is too late.

I work with a few who basically are going to "suck it and see", probably with disastrous consequences.

Post by **RobertT** » 13 Oct 2018, 14:05

heapsy wrote:Good posts from Beamish and Rob. It seems people just don't get what they are told. Sadly, another issue is that people do not "ring fence" money for retirement. That is, to commit a certain amount per week / month regardless. It gets overlooked until it is too late.

That is a big issue, although with kids to feed, mortgages to pay, etc I can understand it to a large extent. But a small level of savings on a regular basis can make a big difference over a long period of time. Preferably increasing it with earnings and/or inflation each year to ensure your savings keep up with the cost of living.

In my opinion it's a good idea to get into the savings habit as soon as possible and as you say, put some money aside every week regardless, however small. The easiest way being to pay AVC's, that way you never actually have the money in your bank account to spend in the first place. Plus as we know, it's very tax efficient.

heapsy wrote:I work with a few who basically are going to "suck it and see", probably with disastrous consequences.

Most in my DO don't really have anything(as far as I know) apart from their basic RM pension, which in most cases won't be enough on its own.

One or two have got big plans, but not very much in place to achieve them. While some have taken their pensions early, and others have opted out altogether, resigning themselves to a longer working life and a poorer retirement as a result. Seemingly happy they've got more money to spend in the pub 4-5 nights a week.

Each to their own I suppose, but the suck it and see approach isn't for me.