ANNOUNCEMENT : ALL OF ROYAL MAIL'S EMPLOYMENT POLICIES (AGREEMENTS) AT A GLANCE (UPDATED 2017)... HERE
ANNOUNCEMENT : NEW CORONAVIRUS FORUM... HERE
08 Mar 2020, 19:19
I've just looked on the SW website to check the performance of my Bonusplan AVC and I note that the summary says this is taxable. I understood this was tax free. Is it just a quirk of the website or am I wrong?
08 Mar 2020, 19:57
Are you referring to the 3 options of: annuity, drawdown & cash? With the cash option saying it's taxable?
If so, then I think it's just how SW choose to display the figures and are effectively treating it as a normal DC scheme.
The annual AVC statements, or Statutory Money Purchase Illustration, put the benefits in terms of buying an annuity. But it also tells you about other choices, the main one being able to use your money to fund the tax free cash when drawing your NRA60 & NRA65 benefits.
08 Mar 2020, 20:27
Many thanks Robert......SW site also tells me I'm well below where I need to be for my pension but obviously it only has site of Bonusplan. I think I have grasped it all now but RM or the Trustees haven't made it easy have they.
If I could trouble you for a further question........am I correct in thinking that if I retired at 60 then all pension payments would be subject to tax but free from NI deductions? Would that apply if I took a pension and left the business before 60?
09 Mar 2020, 05:22
I think it says you're well below where you need to be, because you haven't set yourself a goal. Again, they're not taking into account the fact that you'll be using it to fund your tax free lump sum when taking your main RMPP benefits.
RM pensions are disjointed and the statements aren't set out particularly well, it's no wonder not many people seem to understand them!
All income above the personal tax allowance(currently £12,500 per year) is subject to income tax. That applies to both wages and pension and regardless of age.
NIC's are not payable on pension income.
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