Help regarding add plan

Post by **dodgyinlaws** » 05 Sep 2020, 19:05

I will be 58 in january and i am planning on leaving when i am 60, i choose add plan back in 1997 to buy back years, with add plan closing i am 65 days short of my projected total service, would it be worth paying into bonus plan/flexi plan if i plan to leave in just over two years. Also do i get all my add plan benefits at 60 or 65 or split between both?

Post by **RobertT** » 05 Sep 2020, 20:10

Addplan bought more final salary years, so the extra you've accrued will be payable when you take your NRA60 benefits.

Bonusplan and Flexiplan are basically just savings accounts to provide some or all of the tax free lump sum, so offer different benefits to Addplan.

AVC's are a good way of saving because of the tax breaks – each £1 gross payment from you only actually costs £0.68 when factoring in tax relief and salary sacrifice(PSE) – the taxman pays the rest. Plus Bonusplan benefits from a little extra from RM too.

Two years is a relatively short time in pension terms, but if you put in the maximum while sticking to PSE limits, you can build up a tidy little sum.

There are full timers on these forums who pay £2.88 into Bonusplan, plus another £2(roughly) from RM, and £100 into Flexiplan per week – but they are the gross amounts!
The tax breaks bring that down to just under £70, which is how much your take home pay would reduce by.

Do that for 2 years and you've got a pot worth £10,900 based just on the contributions going in and it's only cost you £7,480. A nice 'profit' of nearly £3.5k for doing not very much at all!
You should be able to take all of that as a tax free lump sum when you take your NRA60 benefits.

I would give you a link to the RMPP website for more info, but it doesn't seem to be working at the moment.

Bear in mind that the contribution limits will be different for part timers, and paying into existing AVC's once the new CDC scheme starts may not be possible.
Also Bonusplan is only available to section C & F members of the RMPP.

Post by **dodgyinlaws** » 05 Sep 2020, 20:45

Thanks Robert, i am full time and in section c, £23.81 a week is deducted out of my wages towards my pension, so if i pay £2.88 a week into bonusplan and £100 a week into flexi plan would i be within the pse limit?

Post by **RobertT** » 05 Sep 2020, 20:54

dodgyinlaws wrote:Thanks Robert, i am full time and in section c, £23.81 a week is deducted out of my wages towards my pension, so if i pay £2.88 a week into bonusplan and £100 a week into flexi plan would i be within the pse limit?

Yes you would.
But if you also make any other tax efficient payments such as the Partnership & Matching share scheme, or you're buying items from MyBundle, you'll have to take those into account aswell. Which will reduce the amount you can pay into AVC's and stay within PSE limits.

Post by **hatter68** » 06 Sep 2020, 15:49

I also was in add plan started as lump sum then 9% of weekly pay think it worked out I purchased over 4 added years. Not sure how it all works out as find pensions confusing.

Post by **RobertT** » 06 Sep 2020, 16:35

I looked into Addplan in the 90's when I first took an interest in my pension, but was told I had the potential to work too many years and wasn't able to buy more. I then started to pay into Bonusplan initially and then Flexiplan not long afterwards.

I still have an old and battered AVC booklet with details of all 3 AVC schemes, here's the Addplan info for anyone interested:

addplan2 001.jpg

addplan3 001.jpg

Post by **freespeech** » 06 Sep 2020, 17:18

RobertT wrote:I looked into Addplan in the 90's when I first took an interest in my pension, but was told I had the potential to work too many years and wasn't able to buy more. I then started to pay into Bonusplan initially and then Flexiplan not long afterwards.

I still have an old and battered AVC booklet with details of all 3 AVC schemes, here's the Addplan info for anyone interested:
addplan2 001.jpg

addplan3 001.jpg

Yes, this is a regret of mine......didn't go with add plan and went bonus plan instead.

Post by **NorthernBoy** » 06 Sep 2020, 18:23

I remember add plan from when I first joined in the 90s.

I got some money back from my equitable life avc that went bust and I put this into add plan, think around 2005. I think I bought about a year and a half of extra service, so consider my self fortunate as i think the scheme closed around this time. I am normally not a lucky person at all.

Post by **RobertT** » 06 Sep 2020, 18:41

NorthernBoy wrote:I remember add plan from when I first joined in the 90s.

I got some money back from my equitable life avc that went bust and I put this into add plan, think around 2005. I think I bought about a year and a half of extra service, so consider my self fortunate as i think the scheme closed around this time. I am normally not a lucky person at all.

Addplan closed to anyone new wanting to buy extra years when the final salary scheme closed in 2008, but those already paying in at that point were allowed to continue until the RMPP closed to future accrual in 2018.

I originally had my Flexiplan invested with Equitable Life, but when they went belly up I transferred the money over to Norwich Union, which was another provider RM used for AVC's at the time. I had to take a 15% hit on my balance if I remember correctly, but NU used to add another 6% onto every payment, so that was an extra perk.

In terms of returns, NU, then Zurich and now Scottish Widows, have all been pretty good.

Post by **fly-catchers** » 17 Dec 2020, 23:26

Addplan was one of my best decisions I ever made working for RM. That and transferring an old pension from another job. Gave me an extra 10 years Final Salary pension at 60 and made the possibility of going before my NRA65 possible. Also did Bonusplan but not alas Flexiplan. Didn't fully appreciate the tax benefits for many years and when I did thought it was too close to going to bother. At least I did put the extra money into a S&S ISA.

Post by **fly-catchers** » 17 Dec 2020, 23:32

RobertT wrote: ↑
06 Sep 2020, 16:35
I looked into Addplan in the 90's when I first took an interest in my pension, but was told I had the potential to work too many years and wasn't able to buy more. I then started to pay into Bonusplan initially and then Flexiplan not long afterwards.

I still have an old and battered AVC booklet with details of all 3 AVC schemes, here's the Addplan info for anyone interested:
addplan2 001.jpg
addplan3 001.jpg

I still have that leaflet but can't ever remember the POPS leaflet No2 they mention on it!

ROYALMAILCHAT