Retirement timeline
To help you understand how long the retirement process can take and the steps involved, we’ve put together this timeline for you to use as a guide. It’s important that you start thinking about and planning for your retirement in good time. If you have a date in mind that you wish to retire by, make sure you have started the process early enough to meet your goals.
10
years before
retirement
Make the most of your pension contributions
- Can you pay in more to your pension savings? It might be worth looking at how much you’re currently paying in each month and checking to see whether you could pay any Additional Voluntary Contributions (AVCs) to boost your pension savings for when you retire.
Track down any lost pensions
- If you’ve worked for different employers, you may have other workplace pension pots and it’s easy to lose track of those pots. It’s a good idea to try and track them down.
- You can use the government’s free Pension Tracing Service to get in touch with the pension providers. Find lost pensions.
5
years before
retirement
Start thinking about your retirement options
- As a member of the RMSPS there are a few options available to you when it comes to taking your pension. Whether that be taking your standard pension option; taking the maximum tax-free lump sum along with a reduced monthly pension; or transferring your pension elsewhere after having taken independent financial advice to do so.
- You can find out more about the ways to receive your DB pension on the MoneyHelper website.
6
months before
retirement
You'll be contacted by Capita to see if you still intend to retire at your Normal Retirement date. If you decide you want to retire later, they'll issue you with a Late Retirement Consent form to complete.
If you want to proceed with your planned retirement, Capita will send you a pack with details of your retirement options (either at your request or automatically as you approach the Scheme’s Normal Retirement Age).
NRA is the age at which you can normally take your pension without reduction. Any benefits you earned before 1 April 2010 have an NRA of 60. Benefits earned after 1 April 2010 have an NRA of 65.
You should select the retirement option that best suits you and send your completed forms back to Capita with any other documentation they request in your retirement pack.
If you are at all unsure of what options you should take regarding your retirement, we recommend you take professional financial advice. You can find an Independent Financial Adviser (IFA) here.
At retirement
Once your retirement has been processed, you’ll receive a Retirement Letter confirming that your pension has been put into payment and when you will receive your payments each month.
Once you start receiving your benefits, you’ll be able to log in to your online account to view your payslips and P60s.
- Start planning for when you want to retire. This may depend on individual circumstances, financial considerations, and health.
- Normal Retirement Age (NRA) is the age at which you can normally take your pension without reduction. In the RMSPS, any benefits you earned before 1 April 2010 have an NRA of 60 and any benefits earned after 1 April 2010 have an NRA of 65.
- You can opt to take all your benefits at once, but any benefits taken before NRA will be reduced for early payment. Alternatively, you can take only your benefits with an NRA of 60 at age 60 and take your NRA 65 benefits later so they are not reduced.
- You may be able to take your benefits early without a reduction if you are suffering from ill health. You can read here about early retirement or ill health retirement.
- Review the savings you have.
- Review your pension statements to understand the size of your pension pot from different employments.
- Check your State Pension entitlement with the Government.
- Start thinking about how much you will need at retirement. You can use MoneyHelper's useful budget planner to get an idea for how much your lifestyle would require.
If you’re interested in taking your pension and you’d like more details about how much you might get at your chosen retirement date, you’ll need to contact the Pension Administration Team to request a retirement quote using the details on the Contact us page.
You can also use the RMSPS pension illustrator by signing in to the Online Portal.
Calculate your pension
Please note that we can only provide a retirement quote once you are within 5 years of retiring. You can request up to two retirement estimates a year from the Pension Administration Team.
It’s also worth thinking now about whether you would like any financial advice to help you plan ahead. You can find an Independent Financial Adviser (IFA) here.
Capita will send you a pack with details of your retirement options (either at your request or automatically as you approach Normal Retirement Age). You should select the retirement option that best suits you and send your completed forms back to Capita with any other documentation they request in your retirement pack.
Planning your retirement
How to start planning
When it comes to planning your life after work, we understand that it can be quite daunting, and you might struggle with where to start. There are lots of things you can do to prepare your finances for when you’re no longer working, such as looking at what you currently have coming in, working out what you’ll need and what you want your retirement to look like (money for holidays or hobbies etc.).
Working out what you’ve got
Whether you’ve got pension savings through a workplace pension or a personal private pension, the first step is to work out what you have, how much and where.
Start by reviewing the amount you have in your RMSPS pension, log in to your online pension account. This will give you a good starting point for how much you currently have saved.
Review your pension pot
Check how much your State Pension could be worth and when you’re eligible to claim it. This could form part of your regular retirement income so it’s good to know how much you’re likely to receive.
Check your State Pension forecast
Find out if you have any other pensions that you might have with previous or current employers. If you know of other pensions you’ve paid into in the past, make sure you locate these and factor any extra pension savings you have into your retirement planning.
Find other workplace pensions
Include any other savings or income you may have. When calculating how much you will have at retirement you should include any money you have in personal savings accounts or any income you still expect to be receiving once you have retired. This could include rental income, or any part time work you might continue or take up.
Working out what you’ll need
Once you’ve figured out how much you’ve already got saved up, you need to work out if that will be enough to support the retirement lifestyle that you want. Ask yourself some questions about the life you’ll be living once you finish working.
- What will you no longer need to pay for?
- What will you have to pay for that you don’t spend money on now?
- Are there any things you would like to do you once you’re retired?
To get an even better idea of how much you’ll need it’s useful to use the RMSPS pension illustrator to get an estimate of the income you’ll get when you retire. This will also show you if you have any gaps in your savings and how you can plan to boost these.
Use the RMSPS pension illustrator by signing in to the Online Portal.
Calculate your pension
Other things to think about
Now you have an idea of how much you’re likely to have and what you think you’ll need, its good idea to plan for the retirement you would like to have.
Here are some things to think about:
- When would you like to retire? This may depend on individual circumstances, financial considerations, and health.
- What kind of lifestyle will you want to live? For example, are there any big trips you would like to go on or any big purchases you're planning on making
- Will you have any outgoings that you won’t have paid off when you retire? It’s important to try and start your retirement with as little debts as possible, as your income is likely to reduce when you retire. You’ll also need to factor in any fixed payments (utility bills etc.).
Early retirement or Ill health retirement
Members can have an RMSPS Normal Retirement Age of 60 or 65. This is the earliest age you can take your benefits from the Scheme without any early retirement reduction. If you are approaching age 55 or over, you can contact Capita for an estimate of your pension options.
Any benefits you earned before 1 April 2010 have an NRA of 60. Benefits earned after 1 April 2010 have an NRA of 65. You can opt to take all your benefits at once, but any benefits taken before NRA will be reduced for early payment. Alternatively, you can take only your benefits with an NRA of 60 at age 60 and take your NRA 65 benefits later so they are not reduced.
Find out more in the Guide to benefits
The minimum age at which you can access your pension is 55. This is known as early retirement. Be aware your pension may be subject to early retirement reduction if you retire at this age. Please note that this minimum age may be increasing to 57.
Ill health can significantly impact your retirement plans, and the Scheme offers provisions for individuals facing qualifying health challenges. If you experience ill health, you may be eligible for early access to your pension. The specific criteria for ill health retirement may vary between different pension schemes you are a member of, but generally it involves demonstrating that you are unable to work due to your health condition.
You will need to provide medical evidence to take your benefits in this way. You cannot be engaged in any employment at the time you apply for, or receive, these benefits. The RMSPS Scheme Manager will consider your claim. If you have benefits in the RMPP and the RMSPS, the RMPP Trustees (RMPTL) will decide if you qualify for an ill health early retirement pension. In order to establish whether you qualify for immediate payment of your benefits on ill health grounds, you will need to contact us to apply.
Opting for early retirement allows you to access your pension sooner but may result in lower pension payments. Depending on the pension scheme, delaying your retirement could lead to an increased pension pot. It’s essential that you evaluate your financial situation, lifestyle and health to make an informed decision.
Please refer to the Scheme information section on your Member Online Portal to find out more. Choosing early or late retirement plays an important role in pension planning.
Budget planner guidance
Budget planning is incredibly valuable when it comes to effective retirement planning. Assessing your current financial situation will allow you to identify areas for potential savings, and help you set realistic retirement goals. You should think about the type of lifestyle you want to have when you retire.
Consider the following questions:
What do you want your retirement to look like?
How much will this
cost you?
How long will your money
have to last?
Remember, your full retirement pot could consist of income from multiple pension schemes, savings accounts, investments and the State Pension. Don’t forget to make a plan to manage any outgoings you might have including bank loans, rent or mortgage and bills.
By understanding how much money you need to achieve the retirement lifestyle you want; you can check whether your current pensions savings, and any other sources of income you’ll have at retirement, can support this. Taking a proactive approach early will enable you to make informed decisions about your contributions into your current pension and how you choose to invest (if applicable). It will also help you understand if you need to make any lifestyle adjustments to support your move towards a more secure financial future.
If you would like to view a forecast of the likely pension income you might get when you retire or see how your retirement age may affect your income, you can use the useful RMSPS pension illustrator by signing into the Portal.
Planning your retirement
Your options
There may be different options to consider when taking your pension benefits, including a tax-free lump sum, income, and annuity purchases. Not all of these options will be available for your RMSPS pension benefits, and you may wish to consult an Independent Financial Advisor to support you with this. We’ll go into more detail about your options below:
Defer
taking your
pension
You may decide to delay taking your pension while you decide on the best course of action. If you want to retire after Normal Retirement Age (NRA), you’ll need to complete the Late Retirement Consent Form for the Trustee to approve. It’s important that you do this well in advance of your NRA as the Trustee may not agree to you retiring late after this date.
Taking a regular monthly pension from the Scheme
You may choose to take all of your benefits as a regular monthly pension. This will be paid for the rest of your life. These payments are increased each year and there may be certain death benefits payable upon your death.
Take a reduced
pension and a
tax-free lump sum
You are eligible to take some of your pension savings as a tax-free lump sum. Your remaining pension benefits will then be used to pay you a regular monthly pension going forward. The monthly payments will be lower than if no tax-free lump sum was taken. This lower regular pension will still be paid monthly, increased each year, and subject to the same death benefit rules as if you had not taken the tax-free lump sum.
Take a small,
one-off lump
sum payment
If the total value of all your pension savings is less then £30,000, you may have the option to take your benefits as a small, one-off lump sum payment. This is sometimes known as a Trivial Commutation Lump Sum. In this option, you receive a one-off payment from the scheme and no further pension or death benefits are payable. Please note, this payment can only be made providing you meet the conditions detailed on the Trivial Commutation Small Lump Sum Form.
Transfer
your
pension
You may be able to transfer your current pension to another provider. This depends on the Scheme rules relating to your section and you’ll have to take independent financial advice before you can transfer out if your benefits are valued at £30,000 or more. To explore this option, you will need to complete a Transfer Request Form for a quote and more information. It’s important to make sure the benefits you expect to receive remain protected if you choose to transfer your benefits to another provider.
Getting quotes
If you are still working for Royal Mail, you should initially talk to your manager to agree the details. Once agreed, you must give your employer written notice as per your organisation’s policy. When Capita receive notification of your retirement from your employer, or you’ve confirmed the date you wish to take payment of your RMSPS pension, Capita will send you an estimate of your benefits and retirement application paperwork.
If you are no longer working for Royal Mail or the Post Office, there is no need to give your former employer written notice. Instead, please get in touch with Capita directly.
If you’re a joint member with benefits in the RMSPS and the Royal Mail Pension Plan (RMPP), whether you are currently paying into the RMPP or not, you will need to request a separate quote from the PSC for your RMPP benefits. Find out about the process in full by reading the Retirement Roadmap.
Your estimate will include details of the pension you’ll receive and the options available to you if you wish to convert some pension into a tax-free lump sum. You’ll then need to make the decision on the amount of pension you wish to convert to a cash lump sum.
Once you know when you want to retire, you should ensure your application is completed and returned six months before your proposed retirement date. Try not to send your request any early than this, as there may be salary changes that could affect your benefits if your application is returned too early.
It’s important that you fully complete all the forms that are sent to you, as any omissions could result in a delay in the payment of your benefits. When Capita receive all relevant documentation from you and your pensionable pay figures from your employer’s payroll department, your pension benefits will be calculated. Confirmation of the actual amount payable will be sent to you.
Once all paperwork has been processed and your benefits have been calculated, your pension will be paid directly into your bank account on the last working day of each month for the rest of your life.
State pension
In addition to your RMSPS pension, you can also receive the State Pension. This is a regular payment from the government and most people can claim this when they reach State Pension age. Your State Pension age depends on when you were born, but for most people it is now age 66.
In addition to your RMSPS pension, you can also receive the State Pension. This is a regular payment from the government and most people can claim this when they reach State Pension age. Your State Pension age depends on when you were born, but for most people it is now age 66.
The amount of State Pension you’ll get depends on how many ‘qualifying’ years of National Insurance payments you have paid. This includes National Insurance contributions that you pay when you are working and contributions that are credited to you when you are unable to work, for example if:
- you've been out of work because of illness, unemployment or maternity leave
- you're a parent of children under age 12 for whom you're claiming child benefit
- you're a carer for someone sick or disabled, or a foster carer, or received Carer's Allowance
You'll also receive National Insurance credits if you are in work, but don't earn enough to pay it.
To find out the maximum basic State Pension visit the Government website.
More info about the State Pension
Planning your retirement
Guidance and advice
Pensions can be a complex subject and it's important that you have all the information you need when it comes to retiring and taking your pension. Making an informed decision about when to retire will help you have a rewarding retirement.
Getting guidance
There are lots of resources to help you at whatever stage you are with your retirement planning. Below are two platforms that provide useful information to help whatever stage you're at.
MoneyHelper brings together a number of helpful services, including Pensions Wise, which can provide guidance around your pension savings, but also wider financial issues like debt and savings.
Pension Wise is a government service that offers free, impartial pensions guidance about your defined contribution pension options. An appointment will help you understand what your overall financial situation will be when you retire. It will focus on your options to help you make the right decision for you, and also allow you to find out about the other factors you need to consider when deciding on your options before retirement. During a Pension Wise appointment, an independent pension specialist will:
- explain your pension options
- explain how each option is taxed
- tell you what your next steps are
If you are not taking regulated financial advice, we strongly recommend that you book an appointment with Pension Wise to discuss the options available to you. The appointment will take between 45-60 minutes and can be over the telephone or somewhere local to you.
These appointments can be booked online directly with Pension Wise, or you can call them on 0800 138 3944 to book an appointment. Book your Pension Wise appointment online.
Getting advice
If you’d like to receive personalised financial advice, you will need to get in touch with an Independent Financial Adviser (IFA). An IFA can look at all your financial arrangements and give you personalised advice to help you make an informed decision about your retirement. You should bear in mind that an IFA will charge for their services
Find an independent financial adviser
All financial advisers are regulated by the Financial Conduct Authority (FCA), so they must follow strict rules when they give you advice. Make sure you check that they’re registered before you start planning.
Check if an adviser is on the financial services register
What you can do to increase what you have
You’ve already made valuable contributions for your future by paying into your RMSPS pension. While you can’t pay additional voluntary contributions into your RMSPS pensions, consider any other workplace pension pots you have.
After considering other workplace pensions and the State Pension, if you would still like to save more to have enough for the retirement you want, you may want to consider opening a personal pension to make more contributions.
Find out how to choose a pension yourself
Even though you’re already paying in each month to your pension, alongside employer contributions from us, boosting your contributions by paying in extra might be the most convenient option for you. This would be referred to as paying Additional Voluntary Contributions (AVCs). AVCs are paid into the L&G Mastertrust. For more information go to the L&G Mastertrust website.
You’re able to check the amount of State Pension you are set to receive on the government’s website. By reviewing your expected State Pension amount you might find that there are gaps in your National Insurance record and may be able to pay in Voluntary National Insurance Contributions to increase your State Pension amount. Check your State Pension forecast.
It might be that if you’ve changed jobs several times over the years and there could be old pensions that you’ve lost track of. If you’re looking for a lost workplace pension and know the name of the employer or scheme you can use the Pension Tracing Service via the government website. If not, they also offer a service to find the pension contact details you might need. Find pension contact details or contact the Pensions Tracing Service.
If you would like to know more about what to do with the money you have saved, you can speak to a regulated adviser who will go through their fees and charges with you before you commit. Find a financial adviser.
Did you find the RMSPS retirement hub useful?