4 more years

[Sputters]

question properly for Robert , its probably hard to say. I pay 24.74 a week into my pension RMPPDBCBSC, and have been at Royal mail for 22 years .how much difference would working another 4 more years make to it when I get to 65 . Thanks

[RobertT]

Based on your weekly contribution, you're currently building up about £4,200 per year in the DBCBS, plus annual increases. But that scheme is due to close in the relatively near future – probably early 2023.
By that time you'll have a total of around 5 years worth of DBCBS, which can be taken with your NRA65, or else transferred out to a personal pension.

Assuming you join the new CDC scheme and based on basic full time pay of £458 per week, that will give you a pension of roughly £300 and a lump sum of about £900 per year of membership. Bearing in mind the pension isn't guaranteed and could go down while you're an employee, deferred or pensioner member.

The alternative to CDC would be to join the Nest scheme. Again based on basic full time pay, the total 8% contribution level going into that would add up to around £1,900 per year.

What you currently have via your NRA65 will increase with inflation until you take it, and continue to increase while in payment. But as I'm sure you know, if you take it early it'll be reduced by 5% per year.

More info on CDC can be found here: https://www.myroyalmail.com/collective-plan

[Sputters]

Thanks Robert and thank you for all your advice over the years

[heapsy]

Based on your weekly contribution, you're currently building up about £4,200 per year in the DBCBS, plus annual increases. But that scheme is due to close in the relatively near future – probably early 2023.
By that time you'll have a total of around 5 years worth of DBCBS, which can be taken with your NRA65, or else transferred out to a personal pension.

Assuming you join the new CDC scheme and based on basic full time pay of £458 per week, that will give you a pension of roughly £300 and a lump sum of about £900 per year of membership. Bearing in mind the pension isn't guaranteed and could go down while you're an employee, deferred or pensioner member.

The alternative to CDC would be to join the Nest scheme. Again based on basic full time pay, the total 8% contribution level going into that would add up to around £1,900 per year.

What you currently have via your NRA65 will increase with inflation until you take it, and continue to increase while in payment. But as I'm sure you know, if you take it early it'll be reduced by 5% per year.

More info on CDC can be found here: https://www.myroyalmail.com/collective-plan

Just read this with interest. Robert I'm very close to yourself in age profile and service. I'm thinking of retiring at 60 and taking my pensions as and when they come at normal NRA. With this in mind, do you think it might be better to join the NEST scheme, bearing in mind I wont get many years in either scheme. And what NRA does the NEST scheme have? I'm 55 in August with the bulk of my pension in the NRA 60 scheme, and am currently building up AVCs which will be taken with that.

Any thoughts?

Thanks.

[NWpostie]

I'm similar to both of you, age, length of service and financial profile, I'm also paying extra into an AVC to the max allowable within PSE limits.

I would be interested regarding CDC.

[RobertT]

To get the maximum pension from CDC you need to wait until 67, but that age doesn't sit well with many.
Whereas Nest is likely to give you less overall(assuming the same length of membership), but has the flexibility of any other DC pension. So the current minimum age of access is 55, which is expected to rise to 57 in 2028.

Personally I think DC pensions work best when used in conjunction with a DB scheme and/or the state pension. They can provide an income, via drawdown, for a few years until other pensions kick in!
So Nest could help to fund early retirement, where CDC might not.

As ever, it will come down to personal circumstances and choices, etc.

[Schiff]

To get the maximum pension from CDC you need to wait until 67, but that age doesn't sit well with many.
Whereas Nest is likely to give you less overall(assuming the same length of membership), but has the flexibility of any other DC pension. So the current minimum age of access is 55, which is expected to rise to 57 in 2028.

Personally I think DC pensions work best when used in conjunction with a DB scheme and/or the state pension. They can provide an income, via drawdown, for a few years until other pensions kick in!
So Nest could help to fund early retirement, where CDC might not.

As ever, it will come down to personal circumstances and choices, etc.

This will likely depend on how easy it is to transfer your "share" of the CDC pot out to a SIPP and how that share will be valued. Potentially CDC, with the larger employer contributions, will still be the best option even for those who will only be members in the short term.

[RobertT]

To get the maximum pension from CDC you need to wait until 67, but that age doesn't sit well with many.
Whereas Nest is likely to give you less overall(assuming the same length of membership), but has the flexibility of any other DC pension. So the current minimum age of access is 55, which is expected to rise to 57 in 2028.

Personally I think DC pensions work best when used in conjunction with a DB scheme and/or the state pension. They can provide an income, via drawdown, for a few years until other pensions kick in!
So Nest could help to fund early retirement, where CDC might not.

As ever, it will come down to personal circumstances and choices, etc.

This will likely depend on how easy it is to transfer your "share" of the CDC pot out to a SIPP and how that share will be valued. Potentially CDC, with the larger employer contributions, will still be the best option even for those who will only be members in the short term.

Good point and one I forgot all about.