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SECTION B Lump Sum Calculation

22 May 2020, 14:11

After 38 years service I took VR at the end of March. I always intended to retire at 60 so in effect I’ve been paid up to stay at home. I've paid off the mortgage & have enough left to draw an income until I'm 60 in just over 2 years time. Then I will take all of my pension.
I've received letters from RMSPS & RMPP detailing figures but I'd like to work out the Max lump sum I could take. Obviously I'm not going to be paying any more in.

Section B with 38 years service no AVCs
RMSPS NRA 60 pension £9196 Lump Sum £27588
RMPP NRA 60 pension £43 Lump Sum £130
RMPP NRA 65 pension £1350 Lump sum £ 4048 (these figures include the 25% reduction for taking it 5 years early)
DBDBS £9457

Total pension £10589
Total Lump sum £31766
DBDBS £9457

From here how do I get my total pension pot?
Pension x20?
Pension x20 + Lump Sum?
And how does the DBDBS factor in?

Do you then multiply total pot by 20 of which 25% can be taken as Lump sum then divide the remaining pot by 20 to give the yearly pension?
Thanks in advance for any help.

SECTION B Lump Sum Calculation

22 May 2020, 16:25

Total Pensions x 20
add standard lump sums
add DBCBS

Total it all up and divide by 4 = Max PCLS of £62,350.75

In effect it will be slightly more than that if you are not taking it until 2 years as your pension will still increase with CPI even though you are not contributing.

SECTION B Lump Sum Calculation

22 May 2020, 16:40

fosal29 wrote:After 38 years service I took VR at the end of March. I always intended to retire at 60 so in effect I’ve been paid up to stay at home. I've paid off the mortgage & have enough left to draw an income until I'm 60 in just over 2 years time. Then I will take all of my pension.
I've received letters from RMSPS & RMPP detailing figures but I'd like to work out the Max lump sum I could take. Obviously I'm not going to be paying any more in.

Section B with 38 years service no AVCs
RMSPS NRA 60 pension £9196 Lump Sum £27588
RMPP NRA 60 pension £43 Lump Sum £130
RMPP NRA 65 pension £1350 Lump sum £ 4048 (these figures include the 25% reduction for taking it 5 years early)
DBDBS £9457

Total pension £10589
---------------------------------------------------------------------------------------------------
My answer
Remember your NRA 60 pension will reduce by around 15% if you take the max lump sum
So here is my Rough guide for yours and this is quick.
RMSPS NRA60 pension £9146 reduced by 15% for taking max lump sum = £7774 and max lump sum of £51,822
RMSPS NRA60 pension £43 with max lump sum of £286
RMPP NRA65 pension £1350 normally with a max lump sum would be reduced by around 15% which would have given you an NRA 65 pension of £1147 and (max lump sum of £7645)
However DBCBS is designed to allow you to take the max amount of £1350 (and use your DBCBS to make up your pension to the max lump sum, within the 25% rules.
So I would say your NRA65 would remain at £1350 and your min lump of £4050.
But now.
NRA 65 £1350 pension
Min lump sum £4050 (max lump would have been £8998)
But Using DBCBS (I have reduced your DBCBS by 25% for taking 5 years early, no one knows the reduction figure for this, however I am working on a 5% reduction rate per year for taking early?)
NRA 65 lump sum = £4050 min lump sum
plus = £4948 from DBCBS
sub total =£8998 which would have been your original max lump sum
plus excess DBCBS=£2144 (taxable at your tax rate, prob 20%)
Total lump sum of NRA 65 and DBCBS after 20% tax of £428 =£10712
Equalling NRA60 pensions of £7774 + £43 = £7817
NRA 65 pension of =£1350
Total pensions of = £9167
NRA 60 max lump sum =£51,822 + £286 =£52108
NRa 65 lumps sums incorporating DBCBS with tax deduction =£10712 (incl estimated 25% reduction of DBCBS for taking 5 years early at 5% per year, this is my guess)
Total lump sums of = £62,820
From memory for NRA 65 I recomend option 2a (double check this)
as I think this is the option to take the max lump sum, whilst being the most efficent way to use your DBCBS money tax wise.
In my opinion don't choose option (I think it is 3B, that is a bad option)
This is only my opinion and I am not a financial advisor!
This is a quick calculation, which I hope is right. (it may be slightly out, as I have done it quickly.
Others on this forum, either Robert T or others will prob also give you a calculation as well.

.

This is my calculations for my pension.
With £28833 pensionable pay £29203 CSDB pensionable pay
Full night allowance PHG reserved rights
27 years 42 days in RMSPS and 10 years in CSDB
and DBCBS of £5724 per year for 2 years and £5900 for 10 months of my final year this year.
final fs.jpg
You do not have the required permissions to view the files attached to this post.

SECTION B Lump Sum Calculation

23 May 2020, 08:42

stephen500 wrote:
fosal29 wrote:After 38 years service I took VR at the end of March. I always intended to retire at 60 so in effect I’ve been paid up to stay at home. I've paid off the mortgage & have enough left to draw an income until I'm 60 in just over 2 years time. Then I will take all of my pension.
I've received letters from RMSPS & RMPP detailing figures but I'd like to work out the Max lump sum I could take. Obviously I'm not going to be paying any more in.

Section B with 38 years service no AVCs
RMSPS NRA 60 pension £9196 Lump Sum £27588
RMPP NRA 60 pension £43 Lump Sum £130
RMPP NRA 65 pension £1350 Lump sum £ 4048 (these figures include the 25% reduction for taking it 5 years early)
DBDBS £9457

Total pension £10589
---------------------------------------------------------------------------------------------------
My answer
Remember your NRA 60 pension will reduce by around 15% if you take the max lump sum
So here is my Rough guide for yours and this is quick.
RMSPS NRA60 pension £9146 reduced by 15% for taking max lump sum = £7774 and max lump sum of £51,822
RMSPS NRA60 pension £43 with max lump sum of £286
RMPP NRA65 pension £1350 normally with a max lump sum would be reduced by around 15% which would have given you an NRA 65 pension of £1147 and (max lump sum of £7645)
However DBCBS is designed to allow you to take the max amount of £1350 (and use your DBCBS to make up your pension to the max lump sum, within the 25% rules.
So I would say your NRA65 would remain at £1350 and your min lump of £4050.
But now.
NRA 65 £1350 pension
Min lump sum £4050 (max lump would have been £8998)
But Using DBCBS (I have reduced your DBCBS by 25% for taking 5 years early, no one knows the reduction figure for this, however I am working on a 5% reduction rate per year for taking early?)
NRA 65 lump sum = £4050 min lump sum
plus = £4948 from DBCBS
sub total =£8998 which would have been your original max lump sum
plus excess DBCBS=£2144 (taxable at your tax rate, prob 20%)
Total lump sum of NRA 65 and DBCBS after 20% tax of £428 =£10712
Equalling NRA60 pensions of £7774 + £43 = £7817
NRA 65 pension of =£1350
Total pensions of = £9167
NRA 60 max lump sum =£51,822 + £286 =£52108
NRa 65 lumps sums incorporating DBCBS with tax deduction =£10712 (incl estimated 25% reduction of DBCBS for taking 5 years early at 5% per year, this is my guess)
Total lump sums of = £62,820
From memory for NRA 65 I recomend option 2a (double check this)
as I think this is the option to take the max lump sum, whilst being the most efficent way to use your DBCBS money tax wise.
In my opinion don't choose option (I think it is 3B, that is a bad option)
This is only my opinion and I am not a financial advisor!
This is a quick calculation, which I hope is right. (it may be slightly out, as I have done it quickly.
Others on this forum, either Robert T or others will prob also give you a calculation as well.

.

This is my calculations for my pension.
With £28833 pensionable pay £29203 CSDB pensionable pay
Full night allowance PHG reserved rights
27 years 42 days in RMSPS and 10 years in CSDB
and DBCBS of £5724 per year for 2 years and £5900 for 10 months of my final year this year.
final fs.jpg



Thank you for taking the time to work it out. I didn’t get options I guess I'll get those nearer the time. Both pensions just sent me information letters with up to date figures.
Seems like you have similar service to me, I started in 1982. aged 19. The pension was so simple back then! I remember being told when I started..... its a job for life, if you work for 40 years you can retire at 60 on a pension of half pay with a nice lump sum.. Now its so complicated!
Good luck with yours in a few months.

SECTION B Lump Sum Calculation

23 May 2020, 12:52

fosal29 wrote:
stephen500 wrote:
fosal29 wrote:After 38 years service I took VR at the end of March. I always intended to retire at 60 so in effect I’ve been paid up to stay at home. I've paid off the mortgage & have enough left to draw an income until I'm 60 in just over 2 years time. Then I will take all of my pension.
I've received letters from RMSPS & RMPP detailing figures but I'd like to work out the Max lump sum I could take. Obviously I'm not going to be paying any more in.

Section B with 38 years service no AVCs
RMSPS NRA 60 pension £9196 Lump Sum £27588
RMPP NRA 60 pension £43 Lump Sum £130
RMPP NRA 65 pension £1350 Lump sum £ 4048 (these figures include the 25% reduction for taking it 5 years early)
DBDBS £9457

Total pension £10589
---------------------------------------------------------------------------------------------------
My answer
Remember your NRA 60 pension will reduce by around 15% if you take the max lump sum
So here is my Rough guide for yours and this is quick.
RMSPS NRA60 pension £9146 reduced by 15% for taking max lump sum = £7774 and max lump sum of £51,822
RMSPS NRA60 pension £43 with max lump sum of £286
RMPP NRA65 pension £1350 normally with a max lump sum would be reduced by around 15% which would have given you an NRA 65 pension of £1147 and (max lump sum of £7645)
However DBCBS is designed to allow you to take the max amount of £1350 (and use your DBCBS to make up your pension to the max lump sum, within the 25% rules.
So I would say your NRA65 would remain at £1350 and your min lump of £4050.
But now.
NRA 65 £1350 pension
Min lump sum £4050 (max lump would have been £8998)
But Using DBCBS (I have reduced your DBCBS by 25% for taking 5 years early, no one knows the reduction figure for this, however I am working on a 5% reduction rate per year for taking early?)
NRA 65 lump sum = £4050 min lump sum
plus = £4948 from DBCBS
sub total =£8998 which would have been your original max lump sum
plus excess DBCBS=£2144 (taxable at your tax rate, prob 20%)
Total lump sum of NRA 65 and DBCBS after 20% tax of £428 =£10712
Equalling NRA60 pensions of £7774 + £43 = £7817
NRA 65 pension of =£1350
Total pensions of = £9167
NRA 60 max lump sum =£51,822 + £286 =£52108
NRa 65 lumps sums incorporating DBCBS with tax deduction =£10712 (incl estimated 25% reduction of DBCBS for taking 5 years early at 5% per year, this is my guess)
Total lump sums of = £62,820
From memory for NRA 65 I recomend option 2a (double check this)
as I think this is the option to take the max lump sum, whilst being the most efficent way to use your DBCBS money tax wise.
In my opinion don't choose option (I think it is 3B, that is a bad option)
This is only my opinion and I am not a financial advisor!
This is a quick calculation, which I hope is right. (it may be slightly out, as I have done it quickly.
Others on this forum, either Robert T or others will prob also give you a calculation as well.

.

This is my calculations for my pension.
With £28833 pensionable pay £29203 CSDB pensionable pay
Full night allowance PHG reserved rights
27 years 42 days in RMSPS and 10 years in CSDB
and DBCBS of £5724 per year for 2 years and £5900 for 10 months of my final year this year.
final fs.jpg



Thank you for taking the time to work it out. I didn’t get options I guess I'll get those nearer the time. Both pensions just sent me information letters with up to date figures.
Seems like you have similar service to me, I started in 1982. aged 19. The pension was so simple back then! I remember being told when I started..... its a job for life, if you work for 40 years you can retire at 60 on a pension of half pay with a nice lump sum.. Now its so complicated!
Good luck with yours in a few months.

I actually originally started in 1977 as a young postman, seconded to "Post office Telephones" London south office in Croydon, working delivering their internal mail at their offices and taking pouches around telephone exchanges and to their regional offices in London rather than a telegram boy, my starting pay was £21.67 incl plus a little for outer London weighting. At 18 my time was up as a young postman and I moved back to my parent office, Croydon mail center, discovering I had to work Saturdays! I transfered to Mitcham DO in Surrey. In early 1980, I resigned from the Post office (I was not employed by Royal Mail) and did 8 months voluntary work. In those days, you could not take a career break. In early 1981, I rejoined the "Post office" at Mitcham DO. Oh I forgot to mention, that on joining the "post office" I had to join the union and at 18 was compulsory enrolled in the Post office superannunation scheme (thanks to the UPW for this). Any way back to 1981 and Mitcham DO, I was a postman, Postman driver, driving dodge vans along with Sherpas, a PHG (which I still am, well in my mind any way). I really enjoyed my time as a delivery postman. First and second deliveries, no households to start with, rebate letters were taken where you had proper mail. Bills over 3 days or with 2 hrs over time and as a postman, if I did PHG work for over 12 hrs I got PHG pay for the whole week. As a PHG I worked in their small locker, registered letters, business replies, a small round, performing small admin tasks such as working out night allowance (early start) and Sat premium. I really enjoyed my time there. In 1987 as I could not afford a house in London, I moved to Cheshire and have been at two mail centres there, the original and a new one that opened in 1999. The early days there were fun, now we have our enjoyable times, but it is no longer the same place that it was. So as for service, in my head, I have 43 years service, but in reality, I have spilt service. 1977 to 1980 and 1981 to present. I plan to retire in December (as I don't want to go through another Christmas at the Post office /Royal Mail and going 2 months early was a financial compromise). I will apply for my pension in June (as long as they have the staff to process my pension) with a payment date of November. I will be gutted if I have to stay longer, just because Capital don't get their act together and pay me on time. Btw for your calculations, you may find that your NRA65 is a little bigger than, even I have put down, with a little less excess DBCBS and that was a rough calculation. I plan to use my lump sums to subside my income till I get my state pension, with roughly £10,000 a year on top of the £11,000 pension to make it up to £20,000 a year. I have no mortgage and by November, no debt. So I should be able to live off it and should be OK as long as inflation is not over 5%. Btw have a look at this, this is from a friends "NRA 65" quote. Note as I said, option 2A appears best use of the DBCBS and most tax efficent. Option 3B is crazy, it would take 30 years to make up the loss of lump sums. You could play around with this illustration to give yourself an idea of what your NRA65 may look like with the different options. I am going for option 2A. Re calculating your NRA65 using this friends illustration and using "ratios" and your DBCBS. Ie replacing £2400.84 with £1300, and reducing your DBCBS from his £12000 to your nearly £10,000 minus 25% for taking it five years early, I come up with for you an NRA65 pension for option 2A, of well (susprise) £1300 a year and £3900 min tax free lump sum + Tax free cash lump sum DBCBS of £4766 = Total tax free lump sums (NRA65) of £8666 + £2326 Excess DBCBS taxable (at prob 20%) ,so minus £465 tax = £10527 total lump sums from NRA65. which is nearly the same figures I gave in my earlier illustations.
final friends option NRA65.jpg
You do not have the required permissions to view the files attached to this post.

SECTION B Lump Sum Calculation

24 May 2020, 09:52

stephen500 wrote:
fosal29 wrote:
stephen500 wrote:
fosal29 wrote:After 38 years service I took VR at the end of March. I always intended to retire at 60 so in effect I’ve been paid up to stay at home. I've paid off the mortgage & have enough left to draw an income until I'm 60 in just over 2 years time. Then I will take all of my pension.
I've received letters from RMSPS & RMPP detailing figures but I'd like to work out the Max lump sum I could take. Obviously I'm not going to be paying any more in.

Section B with 38 years service no AVCs
RMSPS NRA 60 pension £9196 Lump Sum £27588
RMPP NRA 60 pension £43 Lump Sum £130
RMPP NRA 65 pension £1350 Lump sum £ 4048 (these figures include the 25% reduction for taking it 5 years early)
DBDBS £9457

Total pension £10589
---------------------------------------------------------------------------------------------------
My answer
Remember your NRA 60 pension will reduce by around 15% if you take the max lump sum
So here is my Rough guide for yours and this is quick.
RMSPS NRA60 pension £9146 reduced by 15% for taking max lump sum = £7774 and max lump sum of £51,822
RMSPS NRA60 pension £43 with max lump sum of £286
RMPP NRA65 pension £1350 normally with a max lump sum would be reduced by around 15% which would have given you an NRA 65 pension of £1147 and (max lump sum of £7645)
However DBCBS is designed to allow you to take the max amount of £1350 (and use your DBCBS to make up your pension to the max lump sum, within the 25% rules.
So I would say your NRA65 would remain at £1350 and your min lump of £4050.
But now.
NRA 65 £1350 pension
Min lump sum £4050 (max lump would have been £8998)
But Using DBCBS (I have reduced your DBCBS by 25% for taking 5 years early, no one knows the reduction figure for this, however I am working on a 5% reduction rate per year for taking early?)
NRA 65 lump sum = £4050 min lump sum
plus = £4948 from DBCBS
sub total =£8998 which would have been your original max lump sum
plus excess DBCBS=£2144 (taxable at your tax rate, prob 20%)
Total lump sum of NRA 65 and DBCBS after 20% tax of £428 =£10712
Equalling NRA60 pensions of £7774 + £43 = £7817
NRA 65 pension of =£1350
Total pensions of = £9167
NRA 60 max lump sum =£51,822 + £286 =£52108
NRa 65 lumps sums incorporating DBCBS with tax deduction =£10712 (incl estimated 25% reduction of DBCBS for taking 5 years early at 5% per year, this is my guess)
Total lump sums of = £62,820
From memory for NRA 65 I recomend option 2a (double check this)
as I think this is the option to take the max lump sum, whilst being the most efficent way to use your DBCBS money tax wise.
In my opinion don't choose option (I think it is 3B, that is a bad option)
This is only my opinion and I am not a financial advisor!
This is a quick calculation, which I hope is right. (it may be slightly out, as I have done it quickly.
Others on this forum, either Robert T or others will prob also give you a calculation as well.

.

This is my calculations for my pension.
With £28833 pensionable pay £29203 CSDB pensionable pay
Full night allowance PHG reserved rights
27 years 42 days in RMSPS and 10 years in CSDB
and DBCBS of £5724 per year for 2 years and £5900 for 10 months of my final year this year.
final fs.jpg



Thank you for taking the time to work it out. I didn’t get options I guess I'll get those nearer the time. Both pensions just sent me information letters with up to date figures.
Seems like you have similar service to me, I started in 1982. aged 19. The pension was so simple back then! I remember being told when I started..... its a job for life, if you work for 40 years you can retire at 60 on a pension of half pay with a nice lump sum.. Now its so complicated!
Good luck with yours in a few months.

I actually originally started in 1977 as a young postman, seconded to "Post office Telephones" London south office in Croydon, working delivering their internal mail at their offices and taking pouches around telephone exchanges and to their regional offices in London rather than a telegram boy, my starting pay was £21.67 incl plus a little for outer London weighting. At 18 my time was up as a young postman and I moved back to my parent office, Croydon mail center, discovering I had to work Saturdays! I transfered to Mitcham DO in Surrey. In early 1980, I resigned from the Post office (I was not employed by Royal Mail) and did 8 months voluntary work. In those days, you could not take a career break. In early 1981, I rejoined the "Post office" at Mitcham DO. Oh I forgot to mention, that on joining the "post office" I had to join the union and at 18 was compulsory enrolled in the Post office superannunation scheme (thanks to the UPW for this). Any way back to 1981 and Mitcham DO, I was a postman, Postman driver, driving dodge vans along with Sherpas, a PHG (which I still am, well in my mind any way). I really enjoyed my time as a delivery postman. First and second deliveries, no households to start with, rebate letters were taken where you had proper mail. Bills over 3 days or with 2 hrs over time and as a postman, if I did PHG work for over 12 hrs I got PHG pay for the whole week. As a PHG I worked in their small locker, registered letters, business replies, a small round, performing small admin tasks such as working out night allowance (early start) and Sat premium. I really enjoyed my time there. In 1987 as I could not afford a house in London, I moved to Cheshire and have been at two mail centres there, the original and a new one that opened in 1999. The early days there were fun, now we have our enjoyable times, but it is no longer the same place that it was. So as for service, in my head, I have 43 years service, but in reality, I have spilt service. 1977 to 1980 and 1981 to present. I plan to retire in December (as I don't want to go through another Christmas at the Post office /Royal Mail and going 2 months early was a financial compromise). I will apply for my pension in June (as long as they have the staff to process my pension) with a payment date of November. I will be gutted if I have to stay longer, just because Capital don't get their act together and pay me on time. Btw for your calculations, you may find that your NRA65 is a little bigger than, even I have put down, with a little less excess DBCBS and that was a rough calculation. I plan to use my lump sums to subside my income till I get my state pension, with roughly £10,000 a year on top of the £11,000 pension to make it up to £20,000 a year. I have no mortgage and by November, no debt. So I should be able to live off it and should be OK as long as inflation is not over 5%. Btw have a look at this, this is from a friends "NRA 65" quote. Note as I said, option 2A appears best use of the DBCBS and most tax efficent. Option 3B is crazy, it would take 30 years to make up the loss of lump sums. You could play around with this illustration to give yourself an idea of what your NRA65 may look like with the different options. I am going for option 2A. Re calculating your NRA65 using this friends illustration and using "ratios" and your DBCBS. Ie replacing £2400.84 with £1300, and reducing your DBCBS from his £12000 to your nearly £10,000 minus 25% for taking it five years early, I come up with for you an NRA65 pension for option 2A, of well (susprise) £1300 a year and £3900 min tax free lump sum + Tax free cash lump sum DBCBS of £4766 = Total tax free lump sums (NRA65) of £8666 + £2326 Excess DBCBS taxable (at prob 20%) ,so minus £465 tax = £10527 total lump sums from NRA65. which is nearly the same figures I gave in my earlier illustations.
final friends option NRA65.jpg


I worked in the same small delivery office in Somerset for all 38 years, About 20 deliveries with a mix of town & rural. I was a reserve when I joined & learnt every duty in the first 18 months. Back in those days people stayed in the job & it was 7 years before somebody left & I had the chance to join a section. There were 4 in the section rotating around 4 duties 2 towns & 2 rurals. A 6 day week, 1st & 2nd deliveries and yes no leaflets. Hardly any packets or signed for items and you could get the whole delivery in one pouch on a bike. I started counting down the months when all the scanning of everything started especially the recent constant pressure of not missing a scan or making any other mistake. I finished up on a rural but even then your driving was scrutinised with endless facts & figures of every move you make. Anyway in February the manager said to make his savings for the coming year one VR would be offered. As I was the most senior I took it. It all happened quickly & I left on March 28th. After a bit of tax I received just over £47000 which is about what I would have earned net had I stayed until I was 60. Actually after paying off the mortgage I'm slightly better off. The manager seemed to think the current VR package will soon end so maybe I was lucky. I know there were plenty of others in my office who would have gone given the chance.
Thank you for all the figures.

SECTION B Lump Sum Calculation

24 May 2020, 11:49

Fosal29 - good luck with your retirement.

Will be interesting to see in a post covid world if RM start to do a wave of redundancies.

SECTION B Lump Sum Calculation

24 May 2020, 20:50

fosal29 wrote:
stephen500 wrote:
fosal29 wrote:
stephen500 wrote:
fosal29 wrote:After 38 years service I took VR at the end of March. I always intended to retire at 60 so in effect I’ve been paid up to stay at home. I've paid off the mortgage & have enough left to draw an income until I'm 60 in just over 2 years time. Then I will take all of my pension.
I've received letters from RMSPS & RMPP detailing figures but I'd like to work out the Max lump sum I could take. Obviously I'm not going to be paying any more in.

Section B with 38 years service no AVCs
RMSPS NRA 60 pension £9196 Lump Sum £27588
RMPP NRA 60 pension £43 Lump Sum £130
RMPP NRA 65 pension £1350 Lump sum £ 4048 (these figures include the 25% reduction for taking it 5 years early)
DBDBS £9457

Total pension £10589
---------------------------------------------------------------------------------------------------
My answer
Remember your NRA 60 pension will reduce by around 15% if you take the max lump sum
So here is my Rough guide for yours and this is quick.
RMSPS NRA60 pension £9146 reduced by 15% for taking max lump sum = £7774 and max lump sum of £51,822
RMSPS NRA60 pension £43 with max lump sum of £286
RMPP NRA65 pension £1350 normally with a max lump sum would be reduced by around 15% which would have given you an NRA 65 pension of £1147 and (max lump sum of £7645)
However DBCBS is designed to allow you to take the max amount of £1350 (and use your DBCBS to make up your pension to the max lump sum, within the 25% rules.
So I would say your NRA65 would remain at £1350 and your min lump of £4050.
But now.
NRA 65 £1350 pension
Min lump sum £4050 (max lump would have been £8998)
But Using DBCBS (I have reduced your DBCBS by 25% for taking 5 years early, no one knows the reduction figure for this, however I am working on a 5% reduction rate per year for taking early?)
NRA 65 lump sum = £4050 min lump sum
plus = £4948 from DBCBS
sub total =£8998 which would have been your original max lump sum
plus excess DBCBS=£2144 (taxable at your tax rate, prob 20%)
Total lump sum of NRA 65 and DBCBS after 20% tax of £428 =£10712
Equalling NRA60 pensions of £7774 + £43 = £7817
NRA 65 pension of =£1350
Total pensions of = £9167
NRA 60 max lump sum =£51,822 + £286 =£52108
NRa 65 lumps sums incorporating DBCBS with tax deduction =£10712 (incl estimated 25% reduction of DBCBS for taking 5 years early at 5% per year, this is my guess)
Total lump sums of = £62,820
From memory for NRA 65 I recomend option 2a (double check this)
as I think this is the option to take the max lump sum, whilst being the most efficent way to use your DBCBS money tax wise.
In my opinion don't choose option (I think it is 3B, that is a bad option)
This is only my opinion and I am not a financial advisor!
This is a quick calculation, which I hope is right. (it may be slightly out, as I have done it quickly.
Others on this forum, either Robert T or others will prob also give you a calculation as well.

.

This is my calculations for my pension.
With £28833 pensionable pay £29203 CSDB pensionable pay
Full night allowance PHG reserved rights
27 years 42 days in RMSPS and 10 years in CSDB
and DBCBS of £5724 per year for 2 years and £5900 for 10 months of my final year this year.
final fs.jpg



Thank you for taking the time to work it out. I didn’t get options I guess I'll get those nearer the time. Both pensions just sent me information letters with up to date figures.
Seems like you have similar service to me, I started in 1982. aged 19. The pension was so simple back then! I remember being told when I started..... its a job for life, if you work for 40 years you can retire at 60 on a pension of half pay with a nice lump sum.. Now its so complicated!
Good luck with yours in a few months.

I actually originally started in 1977 as a young postman, seconded to "Post office Telephones" London south office in Croydon, working delivering their internal mail at their offices and taking pouches around telephone exchanges and to their regional offices in London rather than a telegram boy, my starting pay was £21.67 incl plus a little for outer London weighting. At 18 my time was up as a young postman and I moved back to my parent office, Croydon mail center, discovering I had to work Saturdays! I transfered to Mitcham DO in Surrey. In early 1980, I resigned from the Post office (I was not employed by Royal Mail) and did 8 months voluntary work. In those days, you could not take a career break. In early 1981, I rejoined the "Post office" at Mitcham DO. Oh I forgot to mention, that on joining the "post office" I had to join the union and at 18 was compulsory enrolled in the Post office superannunation scheme (thanks to the UPW for this). Any way back to 1981 and Mitcham DO, I was a postman, Postman driver, driving dodge vans along with Sherpas, a PHG (which I still am, well in my mind any way). I really enjoyed my time as a delivery postman. First and second deliveries, no households to start with, rebate letters were taken where you had proper mail. Bills over 3 days or with 2 hrs over time and as a postman, if I did PHG work for over 12 hrs I got PHG pay for the whole week. As a PHG I worked in their small locker, registered letters, business replies, a small round, performing small admin tasks such as working out night allowance (early start) and Sat premium. I really enjoyed my time there. In 1987 as I could not afford a house in London, I moved to Cheshire and have been at two mail centres there, the original and a new one that opened in 1999. The early days there were fun, now we have our enjoyable times, but it is no longer the same place that it was. So as for service, in my head, I have 43 years service, but in reality, I have spilt service. 1977 to 1980 and 1981 to present. I plan to retire in December (as I don't want to go through another Christmas at the Post office /Royal Mail and going 2 months early was a financial compromise). I will apply for my pension in June (as long as they have the staff to process my pension) with a payment date of November. I will be gutted if I have to stay longer, just because Capital don't get their act together and pay me on time. Btw for your calculations, you may find that your NRA65 is a little bigger than, even I have put down, with a little less excess DBCBS and that was a rough calculation. I plan to use my lump sums to subside my income till I get my state pension, with roughly £10,000 a year on top of the £11,000 pension to make it up to £20,000 a year. I have no mortgage and by November, no debt. So I should be able to live off it and should be OK as long as inflation is not over 5%. Btw have a look at this, this is from a friends "NRA 65" quote. Note as I said, option 2A appears best use of the DBCBS and most tax efficent. Option 3B is crazy, it would take 30 years to make up the loss of lump sums. You could play around with this illustration to give yourself an idea of what your NRA65 may look like with the different options. I am going for option 2A. Re calculating your NRA65 using this friends illustration and using "ratios" and your DBCBS. Ie replacing £2400.84 with £1300, and reducing your DBCBS from his £12000 to your nearly £10,000 minus 25% for taking it five years early, I come up with for you an NRA65 pension for option 2A, of well (susprise) £1300 a year and £3900 min tax free lump sum + Tax free cash lump sum DBCBS of £4766 = Total tax free lump sums (NRA65) of £8666 + £2326 Excess DBCBS taxable (at prob 20%) ,so minus £465 tax = £10527 total lump sums from NRA65. which is nearly the same figures I gave in my earlier illustations.
final friends option NRA65.jpg


I worked in the same small delivery office in Somerset for all 38 years, About 20 deliveries with a mix of town & rural. I was a reserve when I joined & learnt every duty in the first 18 months. Back in those days people stayed in the job & it was 7 years before somebody left & I had the chance to join a section. There were 4 in the section rotating around 4 duties 2 towns & 2 rurals. A 6 day week, 1st & 2nd deliveries and yes no leaflets. Hardly any packets or signed for items and you could get the whole delivery in one pouch on a bike. I started counting down the months when all the scanning of everything started especially the recent constant pressure of not missing a scan or making any other mistake. I finished up on a rural but even then your driving was scrutinised with endless facts & figures of every move you make. Anyway in February the manager said to make his savings for the coming year one VR would be offered. As I was the most senior I took it. It all happened quickly & I left on March 28th. After a bit of tax I received just over £47000 which is about what I would have earned net had I stayed until I was 60. Actually after paying off the mortgage I'm slightly better off. The manager seemed to think the current VR package will soon end so maybe I was lucky. I know there were plenty of others in my office who would have gone given the chance.
Thank you for all the figures.

Lucky you with the VR sadly, when they were offered years agon, I couldn't afford one. Now I can they are not offering them yet! Actually I would now take compulsory redundancy with 6 months to go! Yes, when I was on delivery, it was one pouch and for the bigger walks, perhaps two. I couldn't cope with the amount of pouches they have today!

SECTION B Lump Sum Calculation

24 May 2020, 20:51

NorthernBoy wrote:Fosal29 - good luck with your retirement.

Will be interesting to see in a post covid world if RM start to do a wave of redundancies.

Please may it happen and within 6 months. I don't want any one forced out, but I will take it!

SECTION B Lump Sum Calculation

25 May 2020, 11:14

stephen500 wrote:
NorthernBoy wrote:Fosal29 - good luck with your retirement.

Will be interesting to see in a post covid world if RM start to do a wave of redundancies.

Please may it happen and within 6 months. I don't want any one forced out, but I will take it!



Most companies will be looking at their cost base / staffing levels, can’t see RM being any different.

Yes, I reckon a lot of posties in their 50s will take VR if it’s offered. Unfortunately those still working will be expected to take on the extra work of those that leave.

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