Age 60 section C options

[ted_e_bear]

I've just received this as I'm approaching 60, (haven't yet received the capita one)

Yes I'm a bit thick can someone please offer advice, I can't see any advantage taking option 2.

PXL_20260111_143840894~2.jpg

[RobertT]

1. Full pension and no lump sum
1a. Full pension and lump sum funded by the Cash Balance
2. Reduced pension and lump sum funded by that lower pension.

In all 3 options, the remaining Cash Balance pot can then be taken with Age65 benefits.

[ted_e_bear]

1. Full pension and no lump sum
1a. Full pension and lump sum funded by the Cash Balance
2. Reduced pension and lump sum funded by that lower pension.

In all 3 options, the remaining Cash Balance pot can then be taken with Age65 benefits.

Ah thanks for that, that's what I thought, so I'm leaning towards 1a, as option 2 would take 20 years to "break even" with option 1 when taking the lump sum into consideration

(obviously the figures involved for the yearly pension payments are pretty low)

So taking 1a of course reduces the cash balance but when I hit 65 can I take part of the remaining cash balance tax free ? If so is that a similar amount ie. £848 and would I take the remainder taxed ?

[RobertT]

Ah thanks for that, that's what I thought, so I'm leaning towards 1a, as option 2 would take 20 years to "break even" with option 1 when taking the lump sum into consideration

For me, option 1a is the best choice.

(obviously the figures involved for the yearly pension payments are pretty low)

RMPP Age60 figures will be very low for most people, as the majority of your Age60 will be with the RMSPS.

So taking 1a of course reduces the cash balance but when I hit 65 can I take part of the remaining cash balance tax free ? If so is that a similar amount ie. £848 and would I take the remainder taxed ?

From a tax point of view, taking some DBCBS with Age60 is the best option as it'll be tax free, but taxable if you leave it until you take your Age65.

The amount of DBCBS you can take with your Age65 will depend on how much that is worth, bearing in mind you can only take it with RMPP Age65.

As a rough guide multiple that RMPP Age65 figure by 20 and then divide by 3, and that's how much DBCBS will be able to take tax free. EG: £3k x 20 = £60k / 3 = £20k.
(That maths also works out with your figures in option 1a).

The remaining DBCBS is paid out as a UFPLS – 25% of that is also tax free with the remainder classed as income and taxed accordingly.

[RMDEAN11]

So you do not count the cash balance fund as part of your total pot before dividing by 3 ? I thought it was yearly amount x20 plus cash balance divided by 3 is your lump sum ?

[RobertT]

So you do not count the cash balance fund as part of your total pot before dividing by 3 ? I thought it was yearly amount x20 plus cash balance divided by 3 is your lump sum ?

In option 1a, you can take a maximum of 25% of your pot as tax free cash, so the pension has got be the other 75%.
If you added on the DBCBS as you thought, you may end up with a lump sum larger than 25%.

So once you know what the 75% is worth, dividing by 3 just gives you the other 25%, which is the amount of tax free cash that can be taken from the DBCBS.

Using Ted's RMPP Age60 quote:

127.32 x 20 = 2,546.40 / 3 = 848.80(within 1p of RMPP's figures)

So the total value of his RMPP Age60 pot is £3,395.20 - 2,54640(75%) + 848.80(25%).


A similar calculation is used for the DBCBS when taken with RMPP Age65, and also for AVC's(generally best taken with RMSPS Age60).

[Chelseablue]

Why is this not simpler? Thinking of going next cpl years , but its a worry not understanding most of it.

[heapsy]

I've just received this as I'm approaching 60, (haven't yet received the capita one)

Yes I'm a bit thick can someone please offer advice, I can't see any advantage taking option 2.

PXL_20260111_143840894~2.jpg

Page is completely blank

[heapsy]

I've just received this as I'm approaching 60, (haven't yet received the capita one)

Yes I'm a bit thick can someone please offer advice, I can't see any advantage taking option 2.

PXL_20260111_143840894~2.jpg

Page is completely blank

[ted_e_bear]

I've just received this as I'm approaching 60, (haven't yet received the capita one)

Yes I'm a bit thick can someone please offer advice, I can't see any advantage taking option 2.

PXL_20260111_143840894~2.jpg

Page is completely blank

Nah something's wrong at your end, I can see it and RobertT quoted my figures so obv could also see it.

[RobertT]

Why is this not simpler? Thinking of going next cpl years , but its a worry not understanding most of it.

Most pensions have different options for taking a bigger lump/smaller income, etc.
But there's been so many changes to the RM schemes over the years(particularly since 2008), it's made understanding them and making your choices, more difficult.

My advice would be to read the info on the various websites, to familiarise yourself with how things work. Or perhaps make a list of the URL's of threads on here, that you think might help you when the time comes.