Could someone help me with figures please

heavy load · Post by **heavy load** » 27 Sep 2020, 12:43

Hi Guys,
I joined Royal Mail in 1990 so am a pension section C member.
Due to ill health it looks like I will plan to leave Royal Mail and retire at 55,I am trying to get my money in order over next two years.
I have about £35,000 in AVC which I am going to put in bank for emergencies,then I will take my Royal Mail pension without a lump sum.
My retirement date at 55 would be September 2022 and the following are my figures from 31st March 2019 illustration.

Final salary pension £10,106 CSBD blocks £4722 Total pension earned £14,828

Final Salary pension Supplement £1125 CSBD supplement blocks £644 Total pension supplement £1,769

Cash Balance Fund Sum £5,842

Could someone please try and guesstimate what my Annual Pension would be if paid out at 55 in September 2022.
I have sort of guessed but worried I have done it wrong and won’t have enough to get by.
Thanks ever so much to anyone who takes the time to help.
I realise the illustration is three years before date so may make it a bit harder to work out
Thanks again.

Post by **freespeech** » 27 Sep 2020, 12:56

heavy load wrote:Hi Guys,
I joined Royal Mail in 1990 so am a pension section C member.
Due to ill health it looks like I will plan to leave Royal Mail and retire at 55,I am trying to get my money in order over next two years.
I have about £35,000 in AVC which I am going to put in bank for emergencies,then I will take my Royal Mail pension without a lump sum.
My retirement date at 55 would be September 2022 and the following are my figures from 31st March 2019 illustration.

Final salary pension £10,106 CSBD blocks £4722 Total pension earned £14,828

Final Salary pension Supplement £1125 CSBD supplement blocks £6444 Total pension supplement £1,769

Cash Balance Fund Sum £5,842

Could someone please try and guesstimate what my Annual Pension would be if paid out at 55 in September 2022.
I have sort of guessed but worried I have done it wrong and won’t have enough to get by.
Thanks ever so much to anyone who takes the time to help.
I realise the illustration is three years before date so may make it a bit harder to work out
Thanks again.

Firstly I would suggest you get sound financial advice.......my take on your situation is that NRA60 would be all your final salary plus 20% of CSDB so £10,106 + £944.....let's say £11k. HOWEVER, you need to reduce that by 25% for taking it five years early. This is £8287 a year. Your NRA65 pension will be 80% of CSDB so £3777. This would be reduced by 50% for taking it 10 years early so £1888 per year. Total then is around £10k......your cash balance also needs to be factored in there too.

The above is rough........if your ill health is causing a work issue you may want to consider if you are able to take IHR as this may mean going without the reductions for taking the pension early but there are very strict rules about this. You will also get both supplements (£1769) on top of the above BUT I THINK THEY ARE REDUCED TOO.

Finally, as I said at the start.....get some proper financial advice before you make a decision.

Post by **freespeech** » 27 Sep 2020, 12:57

......also I think your £6444 is a typo and should be £644.

heavy load · Post by **heavy load** » 27 Sep 2020, 13:00

Thanks Freespeech,
A for spotting mistype and B for taking time to help.
I will of course as you suggest get financial help just wanted to get a rough idea.
Thank you so much for time taken.

Post by **RobertT** » 27 Sep 2020, 13:16

I would agree with Freespeech's rough workings out, but I would expect your 2020 illustration to give a total DBCBS of £11,900 – 12,000, plus around £113 for each week worked after 1st April 2020, assuming no changes in contracted hours.

The pension amounts would also be higher by inflation.

There shouldn't be any income tax issues regarding the AVC's, as by the look of it your £35k will be well within the 25% tax free limit.
Tax on the DBCBS could be payable depending on how long the scheme is in operation for, but i wouldn't expect it to amount to very much.

heavy load · Post by **heavy load** » 27 Sep 2020, 13:28

Thank you RobertT

heavy load · Post by **heavy load** » 27 Sep 2020, 13:31

RobertT,
Do you think my DBCBS would be reduced because of early retirement as I now imagine my Pension supplements would be?

Post by **RobertT** » 27 Sep 2020, 13:57

There's been some debate on these forums as to whether the DBCBS is reduced and by how much. The RMPP website says it is, but on the whole no-one seems to know any specifics.

If you read Stephen500's story(https://www.royalmailchat.co.uk/communi ... 27&t=95839" onclick="window.open(this.href);return false;), that suggests a much lower reduction than the normal 5% per year that applies to the main pension. I think he works it out as about 1.6% per year.

heavy load · Post by **heavy load** » 27 Sep 2020, 14:11

Thank you for help guys.

Post by **NorthernBoy** » 27 Sep 2020, 14:21

Good luck for the future, hope it all works out for you

heavy load · Post by **heavy load** » 27 Sep 2020, 14:34

Thank you Northern Boy,nice one.

lordthornber · Post by **lordthornber** » 27 Sep 2020, 15:53

Can I suggest you invest your AVC better than the bank? Unless you need immediate access to it or have plans for it your money won't make you a cent. I'm not qualified to advise you but I would recommend mentioning it if and when you take advice although a good advisor will be asking anyway. Good luck.

heavy load · Post by **heavy load** » 27 Sep 2020, 17:59

Yes will take what I need and invest remainder,thank you.