withdrawing from pension

[RobertT]

I can only reiterate what the previous posters have written – don’t ever come out of the RM pension scheme or any other works related pension you may have access to now or in the future.

Some people will think that the RM pension Plan will not pay out very much so it’s not worth having or perhaps they think they’ve got better things to do with their money now rather than thinking about their future. But if you look at the maths it’s actually a brilliant investment. Personally I would only have to draw my pension for about 2 years to get back the money I’ve paid in for over 25 years of membership, and everything after that is ‘profit’. What else can produce returns like that?

The RMPP isn’t necessarily going to fund a fantastic retirement on its own, but it is a damn good base to start from. Contributions benefit from tax relief, so a £20 per week payment for example only actually costs £16. Your pension will increase by inflation each year while it’s in payment and with potentially over 20 or 30+ years in retirement those increases will amount to a lot of money. There are spouses pensions, death in service payouts and contributions from RM, plus the vast majority of it is underwritten by the government. Being in the RMPP is an absolute no brainer as the alternative is to work for longer and be worse off in your old age.

[woody]

has anyone with long service opted out of the pension ? i did hear someone with 30 years was thinking of pulling out has this should give a good pension .

best thing i ever did after 22 years i 30k lump sum and £432 per month before the dreaded tax I also left the the second pension running which we started in 2010
until I am 65 hopefully that will build along with avc and the flexy bonus plan go for it

[nataddick]

Totally agree with everything Robert has said - it really is a no brainer to be in the scheme given all the benefits that are available.

Most members are not aware that the Employer's contribution to the pension scheme is a very significant benefit. Here is an extract from the Report and Financial Statements 2013 -2014

Contributions

'Contributions to the Plan, which in total amounted to £567 million during the year, were received in accordance with the schedule of contributions as shown in the Trustee’s Summary of Contributions (page 37). Both RMG and POL paid employer contributions of 17.1% of pensionable pay throughout the period.'

Paying in 6% of pensionable pay (4.8% after tax relief) and getting an employer contribution of over 17% (on average) represents a very good investment and won't be beaten with such a low risk profile.