not on facebook
ANNOUNCEMENT : ALL OF ROYAL MAIL'S EMPLOYMENT POLICIES (AGREEMENTS) AT A GLANCE (UPDATED 2017)... HERE

ANNOUNCEMENT : NEW CORONAVIRUS FORUM... HERE



Pension help

13 Feb 2020, 19:29

In my experience that is exactly what they are doing. If you ring Capita then they usually say that they are just waiting for something from the RMPP and when you ring the PSC they say the opposite. I am now 4 weeks from my 60th and am still awaiting the Lifetime Allowance form which I should have received 6 weeks ago. Apparently I have now missed the next print run so will be another 2 weeks so the PSC informed me today.
Last edited by Steve_claret on 14 Feb 2020, 21:44, edited 1 time in total.

Pension help

14 Feb 2020, 12:52

In my case Capita seem to be pulling their finger out .... I recieved their RMSPS -Retirement Benefits letter today. :thumbup And I'm glad to see they're offering me more than £40 a year. :left:

I note their letter is headed "Cabinet Office", just to confuse matters more. :crazy: The Colourful Timeline Diagram is useful, I had to smile when I read the bottom section .... "Congratulations on your retirement".... they must be confusing me with a Member of Parliment! I take it they do realise some of us are going to be working on? :Boo hoo!

So all there is to do now is decide which option to take. Intially the Lump sum option is appealing to me: A) I'm thinking Tax Free Lump Sum ... into a Tax Free Savings Option ... use it for whatever in the near future .....versus
B)Take a slightly larger Monthly Pension (spookily just over £40 :shock: ) ... and get Taxed on it.

Doing some Fag Packet calculations the Lump Sum is worth about 20 years worth of the reduced ammount of monthly payments. :hmmmm I have also heard it suggested that if you take the Lump Sum and drop dead the folllowing week at least you've had your money. Any thoughts? :cuppa

Pension help

14 Feb 2020, 16:35

Dorset Plodder wrote:In my case Capita seem to be pulling their finger out .... I recieved their RMSPS -Retirement Benefits letter today. :thumbup And I'm glad to see they're offering me more than £40 a year. :left:

I note their letter is headed "Cabinet Office", just to confuse matters more. :crazy: The Colourful Timeline Diagram is useful, I had to smile when I read the bottom section .... "Congratulations on your retirement".... they must be confusing me with a Member of Parliment! I take it they do realise some of us are going to be working on? :Boo hoo!

So all there is to do now is decide which option to take. Intially the Lump sum option is appealing to me: A) I'm thinking Tax Free Lump Sum ... into a Tax Free Savings Option ... use it for whatever in the near future .....versus
B)Take a slightly larger Monthly Pension (spookily just over £40 :shock: ) ... and get Taxed on it.

Doing some Fag Packet calculations the Lump Sum is worth about 20 years worth of the reduced ammount of monthly payments. :hmmmm I have also heard it suggested that if you take the Lump Sum and drop dead the folllowing week at least you've had your money. Any thoughts? :cuppa



Hi, can you tell us what conversion rate they are offering you if you take the lump sum and reduced pension. Eg for every £1 pension given up gives £x in a lump sum

Thanks

Pension help

14 Feb 2020, 19:25

Dorset Plodder wrote:So all there is to do now is decide which option to take. Intially the Lump sum option is appealing to me: A) I'm thinking Tax Free Lump Sum ... into a Tax Free Savings Option ... use it for whatever in the near future .....versus
B)Take a slightly larger Monthly Pension (spookily just over £40 :shock: ) ... and get Taxed on it.

Doing some Fag Packet calculations the Lump Sum is worth about 20 years worth of the reduced ammount of monthly payments. :hmmmm I have also heard it suggested that if you take the Lump Sum and drop dead the folllowing week at least you've had your money. Any thoughts? :cuppa

There are pros and cons to both, but ultimately it'll be a personal choice based on your own circumstances, etc.

The pension is probably the boring option, and you will pay tax on it if you're still working and most probably beyond too, depending on what other income you have. But it will be index linked and go up with inflation each year, giving you a steady income for the rest of your life. So don't underestimate the power of compounding over time.

Lump sums tend to get spent relatively quickly. Once you've bought a new car, had a nice holiday, helped the kids with a house deposit, spoilt the grand kids, or whatever else you spend it on, that's it – it's gone!

My suggestion would be to work out what you're income is going to be when you do give up work. If that's enough to live on fairly comfortably then perhaps a bigger lump sum will give a nice cash boost, if not then think more along the lines of a bigger pension.

Also consider what you're going to do in your dotage. You'll have a serious amount of extra time on your hands and whatever you do with it, will probably end up costing money in one way or another.
Household bills could increase too if you're spending more time at home.
So a frugal life in work, when you're grafting 8 hours a day with occasional holidays, isn't necessarily the same in retirement.

You mentioned a personal pension up thread. What are you going to do with that?
Annuity = steady income for the rest of your life?
Drawdown = use to enable earlier retirement?
That needs to be factored in aswell.

Pension help

14 Feb 2020, 19:26

NorthernBoy wrote:Hi, can you tell us what conversion rate they are offering you if you take the lump sum and reduced pension. Eg for every £1 pension given up gives £x in a lump sum

Thanks

In practice I think it varies a bit, but generally it's around the 1:20 mark.
I'm sure DP or someone else with experience will be able to answer specifically.

Pension help

14 Feb 2020, 19:49

NorthernBoy wrote:]
Hi, can you tell us what conversion rate they are offering you if you take the lump sum and reduced pension. Eg for every £1 pension given up gives £x in a lump sum

Thanks


Doesn't appear to be any figures to ilustrate this NB. On the Option B section it merely says, "The benefit under this option is estimated to represent 3.88% of the Lifetime Allowance" but the other option says basically the same, :crazy: I'm sorry no to be more helpful. I think you'll have to be guided by Robert T. :cuppa

Pension help

14 Feb 2020, 21:33

RobertT wrote:There are pros and cons to both, but ultimately it'll be a personal choice based on your own circumstances, etc.

The pension is probably the boring option, and you will pay tax on it if you're still working and most probably beyond too, depending on what other income you have. But it will be index linked and go up with inflation each year, giving you a steady income for the rest of your life. So don't underestimate the power of compounding over time.

Lump sums tend to get spent relatively quickly. Once you've bought a new car, had a nice holiday, helped the kids with a house deposit, spoilt the grand kids, or whatever else you spend it on, that's it – it's gone!


You mentioned a personal pension up thread. What are you going to do with that?
Annuity = steady income for the rest of your life?
Drawdown = use to enable earlier retirement?
That needs to be factored in aswell.


Very Good advice, as always Robert T :Applause And much food for thought. :hmmmm TBH I hadn't taken the index linking of the pension into consideration :d'oh!

The Lump Sum wouldn't be a problem (I don't mean the spending of it) .... I've always been a very disciplined saver... If I've earmarked money for saving it gets put away (although maybe not in the Best places for returns). I suppose it was just my generation that developed that savings habit.

Glad you mentioned the Personal Pension ... I'm going to have to "Refresh" my memory on the details (again another product of my Savings Habit, thought I'd better put something away while I could). It will probaby get used for an annuity. :hmmmm
You did jog my memory on something else as well. :d'oh! I opted out of SERPs back in April 1996 so there's a small pension to chase there. I presume as there's been no "investment" since they stopped the Opt Out it's just been gathering interest? :hmmmm

All in all I think it's been a good excercise for me to review these things at this stage, and thanks for the advice. I'm not as disorganised as I sound. I did have a very good IFA, one that I'd built up a good relationship with over 20 odd years. I've since moved and not got around to finding another one. :cuppa

Previous page Next page


Page 2 of 2   1, 2