Pension

[petercostello]

I am receiving both my rmpp and rmsp 60 and 65 having retired on IHR .I was talking to a colleague who said that my pension would reduce when I eventually get my state pension due to Union agreement is this true.I started work in 1979 and took IHR just over a year ago July 2021.

[Omega853]

Best man to ask is Robert

[RobertT]

I am receiving both my rmpp and rmsp 60 and 65 having retired on IHR .I was talking to a colleague who said that my pension would reduce when I eventually get my state pension due to Union agreement is this true.I started work in 1979 and took IHR just over a year ago July 2021.

Section C members receive the pension supplement between taking their pension/s and reaching state pension age, as long as they've left RM employment.

If you joined RM in 1979, you should be in section B, which doesn't have the supplement or any other mechanism that reduces your pension when you reach SPA.

[vmaxv4]

He might be talking about the pension holiday COPE ( Contracted-Out Pension Equivalent) between 1999-2012 which he was employed & like myself wouldn’t have paid his full contributions.
He doesn’t say how old he is.
You can check by signing up to the Government Gateway online service which will give you the exact amount & date of when your state pension will be eligible.
If you also find that there is a shortfall in your state pension £185.15 at the moment further rising next April to £204 per Wk there is an option to pay lump sum to get the maximum for the future.

[vmaxv4]

BC82F0F6-74C6-4618-8445-73113BDEF153.jpeg

[vmaxv4]

This is mine also started in 1979 & checked a few days ago.

[RobertT]

He might be talking about the pension holiday COPE ( Contracted-Out Pension Equivalent) between 1999-2012 which he was employed & like myself wouldn’t have paid his full contributions.
He doesn’t say how old he is.
You can check by signing up to the Government Gateway online service which will give you the exact amount & date of when your state pension will be eligible.
If you also find that there is a shortfall in your state pension £185.15 at the moment further rising next April to £204 per Wk there is an option to pay lump sum to get the maximum for the future.

Contracting Out was in operation for DB pensions from 1978-2016.
Personal pensions were able to contract out between 1988-2012.

If you were in such as scheme, for example RM's, then you didn't pay into the state second pension(S2P) for your time in that scheme employment. But you still paid into the basic state pension.

The idea was that the company scheme provided at least what you would have got from S2P.

The COPE amount on your State Pension Forecast is an estimate of the amount that your workplace or personal pension scheme will pay you as a result of contracting out. 

Many people believe that they've been short changed by being contracted out, but in practice there was no ability to contract in to S2P and be in the RM scheme. So if you'd been contracted in to S2P you may have a little more state pension, but you potentially wouldn't have built up any RM pension at all.

Only people who began their National Insurance record in April 2016 or later will need 35 years to get the full state pension. Those with records before then will be 'transitional' and have S2P/COPE factored into their state pension entitlement and may need more than 35 years.
Although it a very personal thing and circumstances will always come into it.

It sounds as if you're aged 64 or thereabouts? In which case you've had 6 full years(2016-2022) to make up for contracting out and still need to contribute another 2 to get the max. Or else pay voluntary NIC's, which is good value for money over the long term!
Whereas I'm about 10 years younger and including this year, have already got the required number of qualifying years.

[vmaxv4]

He might be talking about the pension holiday COPE ( Contracted-Out Pension Equivalent) between 1999-2012 which he was employed & like myself wouldn’t have paid his full contributions.
He doesn’t say how old he is.
You can check by signing up to the Government Gateway online service which will give you the exact amount & date of when your state pension will be eligible.
If you also find that there is a shortfall in your state pension £185.15 at the moment further rising next April to £204 per Wk there is an option to pay lump sum to get the maximum for the future.

Contracting Out was in operation for DB pensions from 1978-2016.
Personal pensions were able to contract out between 1988-2012.

If you were in such as scheme, for example RM's, then you didn't pay into the state second pension(S2P) for your time in that scheme employment. But you still paid into the basic state pension.

The idea was that the company scheme provided at least what you would have got from S2P.

The COPE amount on your State Pension Forecast is an estimate of the amount that your workplace or personal pension scheme will pay you as a result of contracting out. 

Many people believe that they've been short changed by being contracted out, but in practice there was no ability to contract in to S2P and be in the RM scheme. So if you'd been contracted in to S2P you may have a little more state pension, but you potentially wouldn't have built up any RM pension at all.

Only people who began their National Insurance record in April 2016 or later will need 35 years to get the full state pension. Those with records before then will be 'transitional' and have S2P/COPE factored into their state pension entitlement and may need more than 35 years.
Although it a very personal thing and circumstances will always come into it.

It sounds as if you're aged 64 or thereabouts? In which case you've had 6 full years(2016-2022) to make up for contracting out and still need to contribute another 2 to get the max. Or else pay voluntary NIC's, which is good value for money over the long term!
Whereas I'm about 10 years younger and including this year, have already got the required number of qualifying years.

I’ve discussed this issue before & therefore it isn’t the first time I’ve checked after contacting HMRC for a quote a few years ago 2016 ish when it was brought up by my union secretary.
My full state pension date for pension since then hasn’t changed however the difference between the two has diminished.
I’m 62 & therefore will qualify for the full amount three weeks after my 65th birthday.

[RobertT]

I’ve discussed this issue before & therefore it isn’t the first time I’ve checked after contacting HMRC for a quote a few years ago 2016 ish when it was brought up by my union secretary.
My full state pension date for pension since then hasn’t changed however the difference between the two has diminished.
I’m 62 & therefore will qualify for the full amount three weeks after my 65th birthday.

I suspect if the state pension system hadn't changed in 2016, the max you would have got is the rate of the basic state pension, which is currently £141.85. Plus any S2P you might have accrued from other jobs, etc, but as you joined in 1979, that is probably minimal.

With the implementation of the new system, you've been able to increase that amount to what it is today and by the sounds of it will hit the maximum state pension.

Plus you've got the benefit from contracting out aswell.

Win Win!

[vmaxv4]

The cherry on the cake that’s the date (April 2025) when I intend to finish.
Unless I’m lucky enough to get VR if/when it turns up again

[redlen]

Need to point out giving financial advice on an internet forum when not a qualified and a registered financial adviser is a criminal offence.

With matter of financial security in retirement always speak to an independent fiancial adviser, that way you have protections if erroneous advice is given and getting your money back, unlike an internet forum.

Not saying any advice on a forum is bad advice, but better than losing your hard earned pension pot

[RobertT]

Need to point out giving financial advice on an internet forum when not a qualified and a registered financial adviser is a criminal offence.

With matter of financial security in retirement always speak to an independent fiancial adviser, that way you have protections if erroneous advice is given and getting your money back, unlike an internet forum.

Not saying any advice on a forum is bad advice, but better than losing your hard earned pension pot

A lot of comments on this forum are facts concerning the workings of RM pensions, or in the last few posts on this thread, the state pension.
The rest are opinions, often based on individual circumstances.

Anyone with half a brain will look into all their pension and general money issues from all angles, to make sure they're doing the right thing. Or else consult a friend with more knowledge, or an IFA.

But it's worth noting that IFA's aren't perfect and it's been mentioned on here a few times, that they have been consulted about RM pensions and even they don't understand them!

[redlen]

Have to agree, and to be fair, you have to be Alan Turing to understand the different Royal Mail Pensions

[vmaxv4]

Need to point out giving financial advice on an internet forum when not a qualified and a registered financial adviser is a criminal offence.

With matter of financial security in retirement always speak to an independent fiancial adviser, that way you have protections if erroneous advice is given and getting your money back, unlike an internet forum.

Not saying any advice on a forum is bad advice, but better than losing your hard earned pension pot

A lot of comments on this forum are facts concerning the workings of RM pensions, or in the last few posts on this thread, the state pension.
The rest are opinions, often based on individual circumstances.

Anyone with half a brain will look into all their pension and general money issues from all angles, to make sure they're doing the right thing. Or else consult a friend with more knowledge, or an IFA.

But it's worth noting that IFA's aren't perfect and it's been mentioned on here a few times, that they have been consulted about RM pensions and even they don't understand them!

[Schiff]

Need to point out giving financial advice on an internet forum when not a qualified and a registered financial adviser is a criminal offence.

With matter of financial security in retirement always speak to an independent fiancial adviser, that way you have protections if erroneous advice is given and getting your money back, unlike an internet forum.

Not saying any advice on a forum is bad advice, but better than losing your hard earned pension pot

Maybe, as an educated chap, you would like to explain the legal definition of "financial advice" to which you refer.

As a hint, I haven't really seen any financial advice being given on this forum, so I'm not really sure why you felt the "need to point out".