Pension -new starter

[KernowDeth]

I have been working for a month now and was wondering what the deal is with paying into a pension , I was paying into Scottish widows with my old employee doing the same via the workplace pension scheme

What's the deal with RM do they do similar?

[RobertT]

RM normally automatically enrols new starters into the RM Defined Contribution Plan after 3 months of employment, but I think legally it's also possible to ask to join before that.

The RMDCP is administered by Scottish Widows, so you might be familiar with their services, although fund choices, etc can vary between employers.

Lots of info, including the plan guide, can be found via this link: https://www.scottishwidows.co.uk/save/royalmaildcplan/

Also bear in mind that new type of pension scheme is coming RM's way in the relatively near future. Maybe later this year, possibly 2023?

All the info on that can be found here: https://www.myroyalmail.com/collective-plan

[KernowDeth]

Thank you for the reply much appreciated

[Norfolk 'N' Chance]

RM normally automatically enrols new starters into the RM Defined Contribution Plan after 3 months of employment, but I think legally it's also possible to ask to join before that.

The RMDCP is administered by Scottish Widows, so you might be familiar with their services, although fund choices, etc can vary between employers.

Lots of info, including the plan guide, can be found via this link: https://www.scottishwidows.co.uk/save/royalmaildcplan/

Also bear in mind that new type of pension scheme is coming RM's way in the relatively near future. Maybe later this year, possibly 2023?

All the info on that can be found here: https://www.myroyalmail.com/collective-plan

Do you know if you can opt out?

[RobertT]

Do you know if you can opt out?

All the info is in the link/s provided!

But yes you can opt out, but why would you want to?

Contributions into RM pensions benefit from tax relief and salary sacrifice(PSE), meaning each £1 gross payment only actually costs you 68p.

Plus you also get contributions off RM!
For the RMDCP that's up to 10% in return for a 6% gross contribution from you.
For CDC, RM will put in 13.6% in return for 6%.

Factoring the tax breaks, that 6% gross from you is effectively just over 4% net.

Some people will call that 'free money' and some will call it deferred wages, but opting out won't be the best financial decision you ever make.
The pension/s RM provide are part of your overall benefits package!

For a full timer in the RMDCP on £458 per week that effective 4% contribution will cost about £18.50 per week net, and that's how much extra you'd get in your pocket if you opted out.

But by signing up you'd be getting roughly another £55 added on from RM and the taxman.

[Norfolk 'N' Chance]

Do you know if you can opt out?

All the info is in the link/s provided!

But yes you can opt out, but why would you want to?

Contributions into RM pensions benefit from tax relief and salary sacrifice(PSE), meaning each £1 gross payment only actually costs you 68p.

Plus you also get contributions off RM!
For the RMDCP that's up to 10% in return for a 6% gross contribution from you.
For CDC, RM will put in 13.6% in return for 6%.

Factoring the tax breaks, that 6% gross from you is effectively just over 4% net.

Some people will call that 'free money' and some will call it deferred wages, but opting out won't be the best financial decision you ever make.
The pension/s RM provide are part of your overall benefits package!

For a full timer in the RMDCP on £458 per week that effective 4% contribution will cost about £18.50 per week net, and that's how much extra you'd get in your pocket if you opted out.

But by signing up you'd be getting roughly another £55 added on from RM and the taxman.

thanks, thats a great explanation and as you say a no brainer really... I didnt know any of this info