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Pension - confused.

27 Jun 2020, 13:45

Hi people,

I have been automatically enrolled in the Royal Mail Defined Contribution Plan. I pay around £80 a month into the pension. I have only been paying into it for 4 months.....


1. I think I saw you can change the amount/percentage you pay in. Where can I change this? is there a website online I can manage this pension?


2. I may possibly close/cancel the pension as part of me feels that I'd rather have that £80 now as I don't have a massive income as I am part time and have a mortgage to pay and with all this uncertainty with what Royal Mail will do next in terms of job losses, I'd rather have that £80 going into my bank account. I may continue with the pension, but need to make a decision....

If I closed the pension what happens to the 4 months worth (£320) I have already paid in, can I get that back now, or will I be waiting 30+ years to get that back?

Pension - confused.

27 Jun 2020, 15:27

norris9 wrote:Hi people,
I have been automatically enrolled in the Royal Mail Defined Contribution Plan. I pay around £80 a month into the pension. I have only been paying into it for 4 months.....

1. I think I saw you can change the amount/percentage you pay in. Where can I change this? is there a website online I can manage this pension?

Yes - https://www.scottishwidows.co.uk/save/royalmaildcplan/

2. I may possibly close/cancel the pension as part of me feels that I'd rather have that £80 now as I don't have a massive income as I am part time and have a mortgage to pay and with all this uncertainty with what Royal Mail will do next in terms of job losses, I'd rather have that £80 going into my bank account. I may continue with the pension, but need to make a decision....

Factoring in the tax relief and salary sacrifice that £80 is only actually costing you £54.40 and that's how much extra you'll have in your pocket if you stop paying into your pension.
We get those benefits at source, so for each £1 we pay into our pensions our income tax bill is reduced by 20p and NIC's by 12p. Meaning each £1 gross contribution(the amount on your payslip) only actually costs 68p.

Plus you also get contributions from RM - up to 10% of pay depending on your chosen payment tier.

I understand the wish to pay the mortgage, etc but you also have to factor in all that 'free money' you'll be giving away and how you're going to pay for your retirement. It might seem a long way off, but believe me, these things have a habit of creeping up on you!

If I closed the pension what happens to the 4 months worth (£320) I have already paid in, can I get that back now, or will I be waiting 30+ years to get that back?

You will have received contributions from RM too!

If you'd cancelled within 1 month you would have been able to get your contributions back, but as you didn't you have to wait until the legal minimum age(currently 55) before you can touch it.

See the plan guide, available via the link above, for all RMDCP info.

Pension - confused.

27 Jun 2020, 19:57

Your £80 per month means £20 per week wich is 6%. RM adds 10% wich is approx. £33.

£53 per week goes to your pension pot, that`s £2756 per year.

You pay £960 in one year, RM pays £1600 FREE MONEY.

In 10 years time you`ll have £ 27560 in your pot. £9600 will be your contribution, the rest is FREE MONEY from RM you can acces at 55.

As RobertT said, you actually pay less tax and Nin for your contribution.

I understand you have a mortgage etc etc like everybody else but please, think of your future, do you think you`ll be able to live with the state pension? For an extra £20 per week you gain you loose 27 k in 10 years time.

I`m not very good at maths but I know that 10% of my wage FREE MONEY is a bargain I can`t refuse, I actually increased my contribution to 10% and I`m looking to increase it more as soon as I can.

Pension - confused.

27 Jun 2020, 20:16

Your future self will thank you if you can keep up your pension payments.

The pension contribution from Rm still remains decent by industry standards, it’s free money take it if you can.

Pension - confused.

28 Jun 2020, 11:18

Janet Brum wrote:Your £80 per month means £20 per week wich is 6%. RM adds 10% wich is approx. £33.

£53 per week goes to your pension pot, that`s £2756 per year.

You pay £960 in one year, RM pays £1600 FREE MONEY.

In 10 years time you`ll have £ 27560 in your pot. £9600 will be your contribution, the rest is FREE MONEY from RM you can acces at 55.

As RobertT said, you actually pay less tax and Nin for your contribution.

I understand you have a mortgage etc etc like everybody else but please, think of your future, do you think you`ll be able to live with the state pension? For an extra £20 per week you gain you loose 27 k in 10 years time.

I`m not very good at maths but I know that 10% of my wage FREE MONEY is a bargain I can`t refuse, I actually increased my contribution to 10% and I`m looking to increase it more as soon as I can.


How do you increase your contribution, I didn't know you could ?

Pension - confused.

28 Jun 2020, 11:41

grchpo wrote:How do you increase your contribution, I didn't know you could ?

As a member of the RMPP I'm not 100% sure whether RMDCP members can increase or decrease their contributions via their online account or not. But there are contact details for the RM SW pension team in the plan guide, I'm sure they'll be able to sort you out.

Pension - confused.

28 Jun 2020, 13:00

How do you increase your contribution, I didn't know you could ?


I remember I filled and send a form to HR few years back, asking for my voluntary contribution to be increased from 6 to 10% but I can`t find the bloody form anywhere.

The one on RM`s website is not the one I`ve send.

Try calling RMDCP Pensions helpline: 0800 092 8263

https://www.myroyalmail.com/Contacts

RobertT wrote:
grchpo wrote:How do you increase your contribution, I didn't know you could ?

As a member of the RMPP I'm not 100% sure whether RMDCP members can increase or decrease their contributions via their online account or not. But there are contact details for the RM SW pension team in the plan guide, I'm sure they'll be able to sort you out.


Unfortunately we can`t increase or decrease on Scotish Widows website :(

Pension - confused.

28 Jun 2020, 13:17

Found it yay :)

Download the Choices form from https://rmdcp.uk/putting-money-into-you ... more-money

Why they made it so hard to find this extra voluntary pension contribution form , I have no idea, it seems they wanted to hide it...

Pension - confused.

28 Jun 2020, 21:49

Thank you

Pension - confused.

29 Jun 2020, 11:17

NorthernBoy wrote:Your future self will thank you if you can keep up your pension payments.

The pension contribution from Rm still remains decent by industry standards, it’s free money take it if you can.


Mine did. 32 years down the road, once I saw the light, I've put in for bonusplan and flexiplan, I also increased my contributions to flexiplan to just under PSE limits when I could afford to do so.

My 20 year old self actually resented my money for pension being taken out, years down the road I've come to realise the value of the pension scheme even when I was struggling with my mortgage, I still remained in the scheme and once I paid my mortgage off I used to the difference saved to fund my. AVC.

Best decision I've made, got a few years left to go before I can retire in reasonable comfort.

Pension - confused.

29 Jun 2020, 14:07

I'm similar!
When I joined RM as a teenager the deduction on our payslip was called superannuation and I thought it was some kind of tax. So it was a while before I realised I was even in the pension and didn't really take any notice until my mid 20's.

That was when I took an interest in personal finance in general and pensions in particular and when I decided I wanted to retire reasonably early, with 60 being the absolute latest. I realised the RM pension on it's own probably wouldn't be enough, and started to pay AVC's.
At the time the RM pension was still a final salary scheme with an NRA of 60, but I predicted there would be changes along the way and a reduction in benefits, which has proved to be the case!

Every annual statement since has confirmed what I thought in my 20's was correct!

I started with Bonusplan, which with such small contributions was never going to be enough to make a big difference on it's own, and then Flexiplan, which I increased the contributions to most years in line with pay rises, with the addition of lump sums at the end of each tax year.
I started a personal pension along the way to enable me to diversify my investments and give me flexibility, and that came into it's own when pension freedoms were introduced and the ability to drawdown the money instead of having to buy an annuity.

The house was bought and paid for in my late 20's, which was the result of learning from 2 siblings who both got into trouble with their mortgages and money in general. I saved hard to do that and then I had money left over for the AVC's.

Saving might be seen as boring to some, but it's put me in the position of being financially secure and having a substantial pot of money(in various places) to enable me to retire early and on an income similar to my current full time RM wages. As long as I don't do anything stupid, I shouldn't have to worry about money again.

Best thing I've ever done – just need to see out the next 3 years at RM to take me up to 55, and then I'm gone.

Pension - confused.

29 Jun 2020, 14:21

RobertT wrote:I'm similar!
When I joined RM as a teenager the deduction on our payslip was called superannuation and I thought it was some kind of tax. So it was a while before I realised I was even in the pension and didn't really take any notice until my mid 20's.

That was when I took an interest in personal finance in general and pensions in particular and when I decided I wanted to retire reasonably early, with 60 being the absolute latest. I realised the RM pension on it's own probably wouldn't be enough, and started to pay AVC's.
At the time the RM pension was still a final salary scheme with an NRA of 60, but I predicted there would be changes along the way and a reduction in benefits, which has proved to be the case!

Every annual statement since has confirmed what I thought in my 20's was correct!

I started with Bonusplan, which with such small contributions was never going to be enough to make a big difference on it's own, and then Flexiplan, which I increased the contributions to most years in line with pay rises, with the addition of lump sums at the end of each tax year.
I started a personal pension along the way to enable me to diversify my investments and give me flexibility, and that came into it's own when pension freedoms were introduced and the ability to drawdown the money instead of having to buy an annuity.

The house was bought and paid for in my late 20's, which was the result of learning from 2 siblings who both got into trouble with their mortgages and money in general. I saved hard to do that and then I had money left over for the AVC's.

Saving might be seen as boring to some, but it's put me in the position of being financially secure and having a substantial pot of money(in various places) to enable me to retire early and on an income similar to my current full time RM wages. As long as I don't do anything stupid, I shouldn't have to worry about money again.

Best thing I've ever done – just need to see out the next 3 years at RM to take me up to 55, and then I'm gone.


If you don't advertise your intentions too wide you may be lucky and get a VR opportunity too!

Pension - confused.

29 Jun 2020, 14:29

freespeech wrote:
RobertT wrote:I'm similar!
When I joined RM as a teenager the deduction on our payslip was called superannuation and I thought it was some kind of tax. So it was a while before I realised I was even in the pension and didn't really take any notice until my mid 20's.

That was when I took an interest in personal finance in general and pensions in particular and when I decided I wanted to retire reasonably early, with 60 being the absolute latest. I realised the RM pension on it's own probably wouldn't be enough, and started to pay AVC's.
At the time the RM pension was still a final salary scheme with an NRA of 60, but I predicted there would be changes along the way and a reduction in benefits, which has proved to be the case!

Every annual statement since has confirmed what I thought in my 20's was correct!

I started with Bonusplan, which with such small contributions was never going to be enough to make a big difference on it's own, and then Flexiplan, which I increased the contributions to most years in line with pay rises, with the addition of lump sums at the end of each tax year.
I started a personal pension along the way to enable me to diversify my investments and give me flexibility, and that came into it's own when pension freedoms were introduced and the ability to drawdown the money instead of having to buy an annuity.

The house was bought and paid for in my late 20's, which was the result of learning from 2 siblings who both got into trouble with their mortgages and money in general. I saved hard to do that and then I had money left over for the AVC's.

Saving might be seen as boring to some, but it's put me in the position of being financially secure and having a substantial pot of money(in various places) to enable me to retire early and on an income similar to my current full time RM wages. As long as I don't do anything stupid, I shouldn't have to worry about money again.

Best thing I've ever done – just need to see out the next 3 years at RM to take me up to 55, and then I'm gone.


If you don't advertise your intentions too wide you may be lucky and get a VR opportunity too!

Yes, i'm quietly hoping VR comes my way, but not expecting or relying on it.

Pension - confused.

29 Jun 2020, 17:26

RobertT wrote:
norris9 wrote:Hi people,
I have been automatically enrolled in the Royal Mail Defined Contribution Plan. I pay around £80 a month into the pension. I have only been paying into it for 4 months.....

1. I think I saw you can change the amount/percentage you pay in. Where can I change this? is there a website online I can manage this pension?

Yes - https://www.scottishwidows.co.uk/save/royalmaildcplan/



Thanks for this and thanks to everyone else who posted. I will keep my pension and keep on paying 6%.

2 other things:

- I have many sheets in front of me that I got through the post explaining about the pension, what's confusing me is that Zurich and Scottish Widows are mentioned, who does what?

- How do I select an investment to put this pension money into and if you choose to put it in investments does all of it have to go there or can you choose a % of it to be put into one. I have a sheet with a long list of options....Active Global Equity, Diversified Assets, etc etc.... Do I just also use the link provided above to Scottish Widows /RoyalMail plan?


Just had to fill out an online form to get hold of my login details as none of these bleeding forms have what I need on them so can't get onto my account. I am hoping it's a nice easy account to use where I can switch my age of taking the pension from 65 to 55 and easily select an investment to plonk the pension into. I hope I don't have to phone up to do this kind of stuff.

Pension - confused.

29 Jun 2020, 18:37

norris9 wrote:Thanks for this and thanks to everyone else who posted. I will keep my pension and keep on paying 6%.

2 other things:

- I have many sheets in front of me that I got through the post explaining about the pension, what's confusing me is that Zurich and Scottish Widows are mentioned, who does what?

The RMDCP used to be administered by Zurich, but Scottish widows took over around 12 months ago if I remember correctly.

- How do I select an investment to put this pension money into and if you choose to put it in investments does all of it have to go there or can you choose a % of it to be put into one. I have a sheet with a long list of options....Active Global Equity, Diversified Assets, etc etc.... Do I just also use the link provided above to Scottish Widows /RoyalMail plan?

Nobody can really tell you which funds to invest in, because that's a personal choice based on age, attitude to risk, etc. This will tell you the basics of what to consider: https://www.moneyadviceservice.org.uk/e ... n-overview and there is more info on the SW RMDCP site I linked to in my first post. Plus I'm sure a bit of Googling will help too.

You can invest in as many of the funds as you like, in fact spreading the risk and not putting all your eggs in one basket is a good thing.

You can find out more info on the funds available here: https://digital.feprecisionplus.com/cor ... ory=6rmd79

My advice would be to take your time, do your homework and make an informed decision.

Just had to fill out an online form to get hold of my login details as none of these bleeding forms have what I need on them so can't get onto my account. I am hoping it's a nice easy account to use where I can switch my age of taking the pension from 65 to 55 and easily select an investment to plonk the pension into. I hope I don't have to phone up to do this kind of stuff.

As far as I know you can chose and change funds online, although someone might be along in due course and say no you can't. But you can go the paper route, see here for the form: https://rmdcp.uk/help-how-to/useful-documents-1

Pension - confused.

29 Jun 2020, 20:15

RobertT wrote:
norris9 wrote:Thanks for this and thanks to everyone else who posted. I will keep my pension and keep on paying 6%.

2 other things:

- I have many sheets in front of me that I got through the post explaining about the pension, what's confusing me is that Zurich and Scottish Widows are mentioned, who does what?

The RMDCP used to be administered by Zurich, but Scottish widows took over around 12 months ago if I remember correctly.

- How do I select an investment to put this pension money into and if you choose to put it in investments does all of it have to go there or can you choose a % of it to be put into one. I have a sheet with a long list of options....Active Global Equity, Diversified Assets, etc etc.... Do I just also use the link provided above to Scottish Widows /RoyalMail plan?

Nobody can really tell you which funds to invest in, because that's a personal choice based on age, attitude to risk, etc. This will tell you the basics of what to consider: https://www.moneyadviceservice.org.uk/e ... n-overview and there is more info on the SW RMDCP site I linked to in my first post. Plus I'm sure a bit of Googling will help too.

You can invest in as many of the funds as you like, in fact spreading the risk and not putting all your eggs in one basket is a good thing.

You can find out more info on the funds available here: https://digital.feprecisionplus.com/cor ... ory=6rmd79

My advice would be to take your time, do your homework and make an informed decision.

Just had to fill out an online form to get hold of my login details as none of these bleeding forms have what I need on them so can't get onto my account. I am hoping it's a nice easy account to use where I can switch my age of taking the pension from 65 to 55 and easily select an investment to plonk the pension into. I hope I don't have to phone up to do this kind of stuff.

As far as I know you can chose and change funds online, although someone might be along in due course and say no you can't. But you can go the paper route, see here for the form: https://rmdcp.uk/help-how-to/useful-documents-1



Thank you.

Pension - confused.

30 Jun 2020, 11:20

RobertT wrote:I'm similar!
When I joined RM as a teenager the deduction on our payslip was called superannuation and I thought it was some kind of tax. So it was a while before I realised I was even in the pension and didn't really take any notice until my mid 20's.

That was when I took an interest in personal finance in general and pensions in particular and when I decided I wanted to retire reasonably early, with 60 being the absolute latest. I realised the RM pension on it's own probably wouldn't be enough, and started to pay AVC's.
At the time the RM pension was still a final salary scheme with an NRA of 60, but I predicted there would be changes along the way and a reduction in benefits, which has proved to be the case!

Every annual statement since has confirmed what I thought in my 20's was correct!

I started with Bonusplan, which with such small contributions was never going to be enough to make a big difference on it's own, and then Flexiplan, which I increased the contributions to most years in line with pay rises, with the addition of lump sums at the end of each tax year.
I started a personal pension along the way to enable me to diversify my investments and give me flexibility, and that came into it's own when pension freedoms were introduced and the ability to drawdown the money instead of having to buy an annuity.

The house was bought and paid for in my late 20's, which was the result of learning from 2 siblings who both got into trouble with their mortgages and money in general. I saved hard to do that and then I had money left over for the AVC's.

Saving might be seen as boring to some, but it's put me in the position of being financially secure and having a substantial pot of money(in various places) to enable me to retire early and on an income similar to my current full time RM wages. As long as I don't do anything stupid, I shouldn't have to worry about money again.

Best thing I've ever done – just need to see out the next 3 years at RM to take me up to 55, and then I'm gone.


Surprised you plan to go at 55 as you generally seem to be of the opinion that taking your pension early isn't a good idea!
Having said that, having paid your mortgage off in your 20s is some achievement and enabled you to invest wisely so fair play to you!

Pension - confused.

30 Jun 2020, 17:12

TheStrangler wrote:
RobertT wrote:I'm similar!
When I joined RM as a teenager the deduction on our payslip was called superannuation and I thought it was some kind of tax. So it was a while before I realised I was even in the pension and didn't really take any notice until my mid 20's.

That was when I took an interest in personal finance in general and pensions in particular and when I decided I wanted to retire reasonably early, with 60 being the absolute latest. I realised the RM pension on it's own probably wouldn't be enough, and started to pay AVC's.
At the time the RM pension was still a final salary scheme with an NRA of 60, but I predicted there would be changes along the way and a reduction in benefits, which has proved to be the case!

Every annual statement since has confirmed what I thought in my 20's was correct!

I started with Bonusplan, which with such small contributions was never going to be enough to make a big difference on it's own, and then Flexiplan, which I increased the contributions to most years in line with pay rises, with the addition of lump sums at the end of each tax year.
I started a personal pension along the way to enable me to diversify my investments and give me flexibility, and that came into it's own when pension freedoms were introduced and the ability to drawdown the money instead of having to buy an annuity.

The house was bought and paid for in my late 20's, which was the result of learning from 2 siblings who both got into trouble with their mortgages and money in general. I saved hard to do that and then I had money left over for the AVC's.

Saving might be seen as boring to some, but it's put me in the position of being financially secure and having a substantial pot of money(in various places) to enable me to retire early and on an income similar to my current full time RM wages. As long as I don't do anything stupid, I shouldn't have to worry about money again.

Best thing I've ever done – just need to see out the next 3 years at RM to take me up to 55, and then I'm gone.


Surprised you plan to go at 55 as you generally seem to be of the opinion that taking your pension early isn't a good idea!
Having said that, having paid your mortgage off in your 20s is some achievement and enabled you to invest wisely so fair play to you!

I have no intention of touching any of my RM pension before NRA.

When the pension freedoms were introduced in 2015 and the ability to drawdown personal pensions became a reality, I saw that as an opportunity to ramp up the savings into mine to enable early retirement. Which was a fairly easy decision as I'd already built up 25% of total pot value in AVC's by then.

I bought my house in the mid 90's right at the bottom of a property slump when prices were very low compared to now. Had I spent 25 years paying it off, I'd be paying my last instalment at the end of this year and shelled out at least £30k more in interest.
That money has gone into pensions with the addition of tax relief and investment growth and helped massively.

Some people are spenders and some are savers, and it's fair to say I'm the latter!

Pension - confused.

30 Jun 2020, 21:32

Best thing I've ever done – just need to see out the next 3 years at RM to take me up to 55, and then I'm gone

Rob, can’t blame you for retiring at 55 if you can make the numbers work. The world of world is generally pretty crap these days and only gets worse,

I am aiming to go some time between 55 and 60, just trying to put as much aside as possible. I worked out with the favourable tax breaks for retirees you can draw nearly £1400 a month tax free from a DC pot. (assuming no other income) In wage terms that’s like having a 20k wage.

Pension - confused.

01 Jul 2020, 04:40

NorthernBoy wrote:Best thing I've ever done – just need to see out the next 3 years at RM to take me up to 55, and then I'm gone

Rob, can’t blame you for retiring at 55 if you can make the numbers work. The world of world is generally pretty crap these days and only gets worse,

I am aiming to go some time between 55 and 60, just trying to put as much aside as possible. I worked out with the favourable tax breaks for retirees you can draw nearly £1400 a month tax free from a DC pot. (assuming no other income) In wage terms that’s like having a 20k wage.

Yes, that's pretty much what I plan to do.
Based on what I've already got and how much I'm currently saving, I should have enough at 55 to provide myself with a decent income from the personal pension until I'm 60. With some left to supplement my RM pension from then to SPA, and stay within the personal tax allowance.
Although I'll probably take the tax free cash upfront and drawdown the rest, rather than the UFPLS route you seem to be describing.

I haven't ruled out getting myself a little part time job(might be easier said than done with the effects of Covid) to fill some time and make the finances a bit easier, but the aim is that I won't need to.
The RM pension and AVC's will kick in at 60 and 65, providing guaranteed income and additional cash.

The world of work is very different now, and isn't going to get better any time soon.
There are plenty of people who'll have no choice but to work well into their 60's and even into their 70's, and if I hadn't done anything about it, the earliest I could retire completely would be 65.
I wanted to give myself the ability and flexibility to go sooner!

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