Royal Mail pension plan

moneysaver

Hi,
I have just joined The Royal Mail Group today, I am aged 47 with no current pension plan, would it be worth my while making additional voluntary contributions to this pension plan at this time in my life. They give you the chance to contribute extra on top of the current amount of 6% of your gross salary. I would not mind doing this if it would be better than putting money away in a savings account.

Thanks
Moneysaver

dunstonh

I am aged 47 with no current pension plan,

Do you mean you have no retirement provision or nothing that you are currently contributing to?

would it be worth my while making additional voluntary contributions to this pension plan at this time in my life.

really need the answer to the question above as you could have nothing or you could already have older provision that will pay you £30k a year.

They give you the chance to contribute extra on top of the current amount of 6% of your gross salary. I would not mind doing this if it would be better than putting money away in a savings account.

Probably not the best option. Utilising a stocks and shares ISA may be better but that would depend on your personal circumstances.

If you have no retirement provision at all, then you need to be aware that the basic state pension is just over £4500 a year. So, you need to decide if you want to live on that or do something about it. The choice is yours.

TakeittotheLimit.

I wouldn`t bother with Royal Mails pension scheme as it`s in debt and was one of the main concerns of Postmen regarding the recent strikes.
You`d be better off getting a private pension or sticking your money in a high intrest account.

EdInvestor

There's no need to worry about the deficit in the RM scheme - the company is required to fill any holes by law and it's government owned.

http://www.cwu.org/default.asp?step=4&pid=108

The union has an IFA hotline, number above.

If you have no other provision than the state pension it may be sensible to contribute more.But suggest you get forecasts of what you might get from both state pension and RM before deciding.

For state pension:
https://www.thepensionservice.gov.uk

dunstonh

TakeittotheLimit. wrote: »

I wouldn`t bother with Royal Mails pension scheme as it`s in debt and was one of the main concerns of Postmen regarding the recent strikes.
You`d be better off getting a private pension or sticking your money in a high intrest account.

Sorry, that is awful advice. Follow it at your peril.

jamesd

moneysaver, using a savings account would be far worse - you'd expect a few percent above inflation, while investments via a pension or stocks and shares ISA could expect three or four times that, say 7-9% after inflation.

Will the pension people at work give you a forecast of your likely pension benefits that also includes your antcipated state pensions? Worth asking them, since some are set up to do this. Once you have that projection you can decide whether that'll be enough of if you'd rather have more to live on, then ask here for some suggestions on how to reach your target income.

moneysaver

dunstonh wrote: »

Do you mean you have no retirement provision or nothing that you are currently contributing to?



really need the answer to the question above as you could have nothing or you could already have older provision that will pay you £30k a year.

I do have some savings & a pension from another company(which is frozen) I was just wondering if the Royal Mail pension scheme might be better than any savings account in any bank

jamesd

Yes, it'll be better than any normal interest-bearing account. But possibly not better than investing in a different pension or stocks and shares ISA.

It's also worth considering if moving the frozen pension to the Post Office pension is worthwhile, if it's possible. May or may not be an improvement, depends on the details like how much it would be worth in the Post Office scheme.

dasherman

I know this is late but as a Royal Mail employee I think the AVC's they provide aren't too bad and should be looked into.

I pay into their Flexiplan scheme and Bonusplan scheme which is based on 4.5% the LEL(frozen at £3328),this benefits from free money from RM.

I invest with a Norwich Union unit linked fund which I agree probably isn't as good as some other funds but NU give me another 6% on top of my contributions. How many Stakeholders do that?