Reasons to be cheerful!

So, what is so good about pensions I hear you ask? Hello one and all, this is the next episode in a series of blogs to help you to know more about Royal Mail pensions and more. You might not be aware of what a great deal you get saving into a pension scheme. Here, I want to remind you of the main reasons to be cheerful about saving for your retirement. And please let me know your views. I’d love to hear what you think about pensions and your RMDCP pot:

• Do you think it’s a waste of time? or
• Are you proudly watching the amount grow over time?

Either way, please tell me your views (and your reasons for them)! Click on the ‘Get in touch’ link at the bottom of this blog and write a comment in the ‘Suggestions for the Trustees’.

Despite what you might read in the news from time to time, here are some of the highlights to feel good about saving into your RMDCP:

• Most members of the RMDCP are saving 16% of pensionable pay into their pot each year. So, if you earn £25,000 this means £4,000 a year is added to your pot.
• Of that £4,000 saved, it only costs you £1,200 of cash. You more than triple your money straight away. Not many savings schemes can do that for you!
• £2,500 comes from Royal Mail, and £300 is money you would have paid in tax but saving into a pension is tax free.
• It’s safe, guards are in place and the Trustees manage the funds and take care of it until you retire.
• Your money is invested so that it grows over time and aims to beat inflation.
• If you die before you retire, the entire pot will go to whoever you nominate, tax free. Make sure you have an ‘expression of wish’ completed so we know where you would like the money to go to.
• Finally, the new State Pension (2022/3) is £9,627.80 a year (if you have a long enough National Insurance record).

I don’t want to be working forever and I don’t want to sell my house to pay for my pension. That’s why I know that, along with my State Pension, saving into a workplace pension will mean I can stop work eventually and help pay for a more comfortable retirement. You may have other pensions from your other jobs too, and you might find it easier to put all your pension pots into one place.

When you reach retirement, you might be tempted to cash your pots in. It is best to get advice and Royal Mail will pay for you to get that advice. To find out what can make the most of your pension savings, call the Royal Mail Helpdesk on 0800 082 8263 and ask to get your details sent over to HUB. They will then contact you and work out a plan for you.

So overall, you have your workplace pension which is tax-free and has contributions from Royal Mail, and you have the State Pension if you pay National Insurance for long enough, and you may have other savings. All of these together will mean that you can aim to enjoy a comfortable retirement.

Please let me know what you think. Do you disagree? And, what else do you want to know about your Royal Mail pensions? Send me a message on the ‘Get in touch’ page.

Wishing you all the very best,

Ben