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Wages of taking all pensions

07 Feb 2020, 12:28

If you take all your pensions and continue working for rm, what are the possible overall changes to your normal wages? For someone that doesn't do overtime and is still therefore in the lower tax bracket.
Do you pay more national insurance?
As no longer paying into a pension would your take home wage increase?

Wages of taking all pensions

07 Feb 2020, 15:28

You do not pay NI on pension income, but you will pay 20% income tax (assuming above tax free allowance)

Your take home wage will increase on your normal wages but remember you will be paying more NI and tax if you do not pay into a pension, so the increase may not be as much as you think.

Wages of taking all pensions

09 Feb 2020, 16:19

you will also be asked to pay into a government pension if you take all of your RM pension. a couple of lads at work took theirs (NRA 60 & 65) and they were taking home about £20 a week more on a normal flat week, as they no longer pay into the RM pension. the government pension is roughly about the same cost as RMs pension scheme at about 20-22 quid a week. however, even though they will automatically start deducting this from your pay, it is entirely optional, and if you don't wish to carry on paying into the government one then you simply opt out and will receive a refund of any money you have paid in. its a way of bumping up your old age state pension so its a bit of a ''no brainer'' not to really.

Wages of taking all pensions

09 Feb 2020, 17:40

What actually happens is that under auto-enrolment, every employer has to offer their employees a pension scheme. It's then up to the employee whether they want to opt in or out!
That scheme could be DB, DC or even CDC.

If you choose to take both your NRA60 & NRA65 pensions, you are no longer an employee member of the RMPP, and in the course of time you will be automatically enrolled into the RM Defined Contribution Plan. Which you can then choose to opt out of if you want to.

So it's not a government scheme, it's a RM scheme. But the government insist on RM offering a pension to every employee!

Paying into any RM pension scheme doesn't increase your state pension at all, but choosing to take your NRA60 & NRA65 benefits before their 'correct time' will for most people and based on averages, reduce their overall income in retirement.

Paying into the RMDCP, which is basically just a savings account with options, will not make up for the long term reduction in guaranteed income you're giving up by taking your NRA60 & NRA65 early.

Wages of taking all pensions

11 Feb 2020, 16:45

well when I say ''bumping up your old age pension'' I meant the optional one you 'opt' to pay into will give you extra money when you get to your old age pension. the lad at work says its a ''workplace pension'' and RM still pay towards the amount he pays. so he's paying £22 a week, RM pay about 15 quid and he gets tax relief on it so he reckons he has about 40 quid a week going into this pension he's paying into. he took both his NRA 60 and 65 pensions with lump sums at 55 and got a lump sum of 42000, and a monthly pension of £425. and will have another lump sum to get on top of another pension when he eventually retires at 65.

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