LUMP SUM

[DavyEK]

Hi

When I take my age 65 pensions I estimate the annual sum will be around £6,000 and the lump sum £18,000.

Can anyone estimate the maximum amount I can boost the lump sum to?


Thanks a lot

[freespeech]

Hi

When I take my age 65 pensions I estimate the annual sum will be around £6,000 and the lump sum £18,000.

Can anyone estimate the maximum amount I can boost the lump sum to?


Thanks a lot

Pretty sure you can't do much to influence NRA65 (or 60) now as that was the old scheme. New scheme has an NRA of 67.

[RobertT]

Hi

When I take my age 65 pensions I estimate the annual sum will be around £6,000 and the lump sum £18,000.

Can anyone estimate the maximum amount I can boost the lump sum to?

Thanks a lot

More info required if you want a proper answer!

Which section are you in? Sounds like A/B?
What does your last annual statement say?
Are you including your Cash Balance?
How long until you take it?
Are you including inflation?

Probably lots more.......

[Walter sobchak]

Hi

When I take my age 65 pensions I estimate the annual sum will be around £6,000 and the lump sum £18,000.

Can anyone estimate the maximum amount I can boost the lump sum to?


Thanks a lot

Hi there, do you mind me asking how many years you’ve been paying into the pension?

[RobertT]

Hi

When I take my age 65 pensions I estimate the annual sum will be around £6,000 and the lump sum £18,000.

Can anyone estimate the maximum amount I can boost the lump sum to?

Thanks a lot

Hi there, do you mind me asking how many years you’ve been paying into the pension?

Nobody has accrued more than 8 years worth of Age65 pension.

It started in 2010 and closed in 2018, although the DBCBS is a lump sum attached to Age65 which ran for 6.5 years(2018-2024).

[DavyEK]

Apologies all - thank you for replying and I realise I was scant on info...

I joined RM 1979 and left 2016.

Oct 24 RMPP statement section AB shows £2971 pension, £8914 lump sum (NRA 65)
Oct 24 RMSPS statement shows £1644 pension, £4935 lump sum (NRA 65)

I have taken my NRA 60 Benefits and turn 65 in April 2026.

Hope that helps

[RobertT]

You can usually take a maximum of 25% of your pot as tax free cash and the method for working that out for section A/B members is pension x 20 + lump sum / 4 = max lump sum.

So for your RMPP benefits that would read:

2,971 x 20 = 59,420 + 8,914 = 68,334 / 4 = 17,083

As a rough guide you'll lose around £1 in pension for each £20 in additional lump sum, so in return for that extra £8,169 lump sum, you're giving up around £408 in yearly income.

The same maths with your RMSPS figures would mean giving up around £225 in pension for an extra lump sum of £4,518.


*Figures are a rough guide to what you might get, you'll get accurate numbers when you get your quotes.
*The method for working out max lump sum varies for section C members as they don't get a lump sum as standard. It's also a bit different for those with DBCBS and/or AVC's.

[DavyEK]

You can usually take a maximum of 25% of your pot as tax free cash and the method for working that out for section A/B members is pension x 20 + lump sum / 4 = max lump sum.

So for your RMPP benefits that would read:

2,971 x 20 = 59,420 + 8,914 = 68,334 / 4 = 17,083

As a rough guide you'll lose around £1 in pension for each £20 in additional lump sum, so in return for that extra £8,169 lump sum, you're giving up around £408 in yearly income.

The same maths with your RMSPS figures would mean giving up around £225 in pension for an extra lump sum of £4,518.


*Figures are a rough guide to what you might get, you'll get accurate numbers when you get your quotes.
*The method for working out max lump sum varies for section C members as they don't get a lump sum as standard. It's also a bit different for those with DBCBS and/or AVC's.

Thanks a Lot Robert I really appreciate that

[roadrunner bill]

Hi

When I take my age 65 pensions I estimate the annual sum will be around £6,000 and the lump sum £18,000.

Can anyone estimate the maximum amount I can boost the lump sum to?

Thanks a lot

Hi there, do you mind me asking how many years you’ve been paying into the pension?

Nobody has accrued more than 8 years worth of Age65 pension.

It started in 2010 and closed in 2018, although the DBCBS is a lump sum attached to Age65 which ran for 6.5 years(2018-2024).

I thought robert.... the section c pension finished in 2012... not 2010.. I'm not sure if I've asked this before...

[RobertT]

I thought robert.... the section c pension finished in 2012... not 2010.. I'm not sure if I've asked this before...

Which pension you're in will usually depend on when you started with the company.

In practice some people might have had more than one stint at RM and some will have opted out or taken their benefits with one scheme and then joined another. In which case, those people might have benefits with more than one scheme.

But in general:

If you joined RM before April 1987 you'll be in section A/B.
Joined between April 1987 and March 2008, it's section C.
Joined after April 2008, it's the RMDCP with Scottish Widows.

All the above ran until 2024 when the new collective pension(RMCPP) started.

For those in sections A, B & C:

Age60 was accrued upto 2010, which is made up of final salary upto 2008 and average salary 2008-2010.
Age65 was 2010-2018, which is all average salary, plus DBCBS 2018-2024.
Pensions before 2012 are administered by RMSPS, and 2012-2024 are RMPP.

[NorthernBoy]

As Robert has stated the guide for converting pension to lump sum is usually around 20 to 1.

However I have recently had my figures back and they are currently higher.

RMPP

For both NRA 60 & 65 the rate is 27.6

RMSPS

For both NRA 60 and 65 the rate is 24.3

This is for taking at 55, I do not know whether your age affects the conversion rate or not. At these rates I am taking the maximum lump sum.

[RobertT]

As Robert has stated the guide for converting pension to lump sum is usually around 20 to 1.
However I have recently had my figures back and they are currently higher.
RMPP
For both NRA 60 & 65 the rate is 27.6
RMSPS
For both NRA 60 and 65 the rate is 24.3
This is for taking at 55, I do not know whether your age affects the conversion rate or not. At these rates I am taking the maximum lump sum.

I suspect it might be more a case of the lump sum isn't reduced by as much as the pension, when taken early?

I find it strange that RMPP and RMSPS are quoting you different commutation rates.

[NorthernBoy]

As Robert has stated the guide for converting pension to lump sum is usually around 20 to 1.
However I have recently had my figures back and they are currently higher.
RMPP
For both NRA 60 & 65 the rate is 27.6
RMSPS
For both NRA 60 and 65 the rate is 24.3
This is for taking at 55, I do not know whether your age affects the conversion rate or not. At these rates I am taking the maximum lump sum.

I suspect it might be more a case of the lump sum isn't reduced by as much as the pension, when taken early?

I find it strange that RMPP and RMSPS are quoting you different commutation rates.

Not sure why there is a difference in the ratio between the 2 providers.

Either way I’m taking the maximum lump sum I can. I view these conversion rates as very good.