Pension briefing

[Postie Malone]

If people are looking how not so not so great this new Royal Mail pension scheme is, look what the experts say

It is totally erroneous to call it scaremongering to close a debate down from an unqualified individual offering pension advice when there are real concerns with security in retirement

But do not take my word on it as I will supply an objective link from the experts, not personal opinions selling a product

https://www.thisismoney.co.uk/money/pen ... cheme.html


https://www.thisismoney.co.uk/money/pen ... -work.html

So to quote from the pensions expert in your first link

Opinions vary considerably on the merits of CDC schemes of this sort. A member would probably generally prefer a DB scheme but that may not be on offer.

Compared with an individual DC scheme where all the risk is on the individual, a 'collective' DC scheme may offer greater predictability.

One important advantage is that in a CDC scheme your pension lasts as long as you do – the scheme deals with the issue of your uncertain life expectancy by 'pooling' the risk of you outliving your money across all scheme members.

You ask whether you should opt out of this arrangement and instead choose one with another provider where the employer will only pay in 3 per cent.

Whilst I cannot give you financial advice, I would simply point out that you would have to do very well in a scheme where the employer only pays in 3 per cent of salary to get a better result than in a scheme (like the CDC scheme) where the employer is paying in over 13 per cent.

It remains to be seen if CDC schemes will take off in the UK as they have done in a number of other countries, but they may offer a valuable 'third way' of providing pensions which is affordable to the employer but still valuable to the member.

So what are your real concerns with security in retirement?

You are not going to be offered a DB scheme. Your pensions expert says that this is probably better than an individual DC scheme and certainly better than one where the employer pays in the bare minimum. If you wish to opt out then go ahead. Those of us with any sense whatsover will happily trouser the increased pension thanks to the generous employer contributions to this new scheme.

[redlen]

How about may, could, if?

The pension scheme offers no guarantees, you do not even know what your pension pot will be when you retire to make plans for financial security in retirement.

Highlighting individual paragraphs in the links to give persuasion to your own personal opinions is deceitful in selling a product. Not to mention it is a criminal offence to offer pension advice when not officially certified. if people require qualified advice they will need to consult an Independent Financial Advisor, not a nameless individual on an internet forum trying to sell a product for what ever reason. That is why I have posted the entire links so people can read the entire articles, warts et al. and draw their own conclusion.

[RobertT]

I don't see anyone trying to give financial advice here, just someone who's trying to sell the RMCPP as they think it's the better option for most people. They're perfectly entitled to do that, despite it conflicting with your opinion.
Proper financial advice would be tailored to the individual with their specific circumstances in mind. That is clearly not the case here!

My view is that we've gone way past the pros and cons of the RMCPP, which have been discussed on this forum many times over the last 6-7 years.
The information on how it works is freely available for all to read and so are the opinions of those in the pensions industry, some of which are in favour and others aren't.
Therefore it's up to the individual to do their homework and make up their own mind. Which could be with the help of an IFA if needed.

Ultimately, it is what it is and you either want to join or you don't!