Help

If you stop working through ill-health, you may be able to take your pension early by applying for ill-health retirement benefits (as long as you have not already taken your benefits while in employment).

This may be approved if:

• you have at least five years’ membership in the Section (including transferred membership);
• you are under your NRA;
• you apply within a year of leaving work (although the Trustee may consider your application after this time); and
• the Trustee, having taken advice from a medical expert, agrees that, due to a more than temporary medical condition, you can’t work in your current job or another suitable job.

If the above is not applicable you will usually not be able to access your benefits before your Normal Minimum Pension age (usually 55) and they will be reduced to reflect that they are being paid early. If you choose to access your benefits early, it is only the benefits you have built up while you were a member that will be used to calculate what you may receive.

You can find the rules and reduction factors for your section in your 'Member guide' which you can access in 'My library' by registering or  logging in to your myRPS account 

You can find more information about applying for ill-health retirement benefits in the Guide for members applying for incapacity benefits.

If you suffer from a serious illness and your life expectancy is less than 12 months, you may be able to take all your pension as a lump sum. You can do this if:

• you have left active membership of the Scheme; and
• you have not claimed any benefits from this or any other Section of the Scheme.

Additional Voluntary Contributions (AVCs) are extra contributions you pay into the Scheme, on top of the regular contributions you and your employer pay in.

You can either make AVCs regularly, or as one-off payments.

AVCs are taken from your wages before tax, which means you get tax relief too.

AVCs can be a way of boosting your savings or making up any shortfall, if there is one, between the pension you will get and the amount of income you need to fund the lifestyle you want when you stop work.

With AVCs, you decide:

• how much you want to contribute (which is tax-free subject to certain limits – see gov.uk for details)
• how you invest your contributions
• when you start and stop the additional contributions

Whether you join an AVC arrangement is up to you, but it may be something you want to consider if you:

• have earnings that don’t count towards your RPS pension, such as bonuses or overtime
• are thinking about taking your benefits early (if you are eligible)
• want to save a bit more towards your future retirement income

If you are a Defined Benefit member, the main AVC arrangement is called BRASS. There is a limit on the amount you can contribute to BRASS in a Scheme year. If you exceed that limit, you could continue to save more with AVC Extra.

If you're an IWDC member you may be able to increase your contributions. If you want to make any changes you should speak to your employer.

Please visit the saving more page for further details. 

A pension works by taking all the money paid in over the years – by you, your employer and the government (in the form of tax savings) – and investing it for your future.

With some schemes, you choose how to invest your money and these are usually referred to as ‘defined contribution’ or 'money purchase' pension schemes. This means you have your own pot of money which can be used to provide an income when you retire. The size of the pot mostly depends on how much has been paid in and how well your investment funds have performed.

Other types of pension schemes work differently, and the amount you get when you retire will depend on things like how long you've been a member, your final salary when you retire, or the average of how much you've earned over your career. These pension schemes are commonly referred to as ‘defined benefit’, ‘final salary’, or ‘career average’ arrangements.

The Railways Pension Scheme (RPS) Shared Cost Sections are defined benefit sections while the Industry-wide Defined Contribution (IWDC) Section of the RPS is defined contribution.

You can find out more on the 10 things to know about pensions page. 

Like many things in life, saving is a whole lot easier if you don’t have to do it alone. With a workplace pension it isn’t just you saving for your retirement; your employer and the government (in the form of tax relief) helps too.

The money paid into your pension is known as 'contributions'. Contributions can come from:

• You
• Your employer – which is a benefit you're unlikely to get with other savings schemes! 
• The government – through tax relief. Whilst there are lots of ways to save money for the future, a pension can often be the most tax-efficient one while you are working, as your pension contributions will receive tax relief from the government.

Take the time to think about what you might want or need for your retirement. By planning ahead, you can keep your pension savings on track for the future you want.

You can use the Retirement Budgeting Calculator to see how much income you’ll need for the life you want after work.

Then, find out how much income you’re likely to get from your pension by checking your Annual Benefit Statement (ABS) or using the tools in your myRPS account  (or registering if you haven't already). This includes the Pension Planner for DB members and Retirement Modeller for IWDC members.

By comparing the two figures, you’ll have an idea of whether you’re saving enough to fund the lifestyle you want. You can find out more by visiting:

• The how much I’ll need page for DB members
• The how much I’ll need page for IWDC members 

For DB members the amount you'll get is based on the rules of your section of the RPS. You can find these in your Member Guide in the 'My Library' area of your myRPS account.

For IWDC members , the amount you will get depends on how much has been paid in, how well your investments have performed and how you decide to take your pot. You can read more about your options in the IWDC area of the website or at MoneyHelper.org.uk

You can also ‘top up’ your pension by paying Additional Voluntary Contributions (AVCs). 

You can find out how much income you’re likely to get from your pension by checking your Annual Benefit Statement (ABS) or using the tools in your myRPS account. This includes the Pension Planner for DB members and the Retirement Modeller for IWDC members, as well as the option to request an estimate once you're logged in.

From 6 April 2028, the Minimum Pension Age will be increased from 55 to 57. If you will reach age 55 on or after 5 April 2028, you won’t be able to retire before 57 unless you have a Protected Pension Age of either 50 or 55.

We haven’t updated our estimates process or planning tools to reflect this change yet. So although you can still request an estimate or use the Pension Planner, from age 55 the information quoted may not be accurate.

You can read more about the change in this article.

The earliest age you can start taking your pension.

From 6 April 2028, the Minimum Pension Age will be increased from 55 to 57. If you will reach age 55 on or after 5 April 2028, you won’t be able to retire before 57 unless you have a Protected Pension Age Protected Pension Age of either 50 or 55.

We haven’t updated our estimates process or planning tools to reflect this change yet. So although you can still request an estimate or use the Pension Planner, from age 55 the information quoted may not be accurate.

You can read more about the change in this article.

Your pension scheme is managed by a group of people called the ‘Trustee’ who are responsible for looking after the scheme and all the money invested on your behalf. The Trustee is made up of employer and elected member representatives.

Their job, with the help of pension and investment specialists, is to regularly check the investment options available to members are appropriate, how the Scheme administration and investments are doing and keep you informed of important information. You can learn more in the Trustee area of the website.

There’s lots of information about your RPS pension on this website and even more is available if you register and/or log in to your myRPS account. 

Some other really useful websites include:

MoneyHelper 

MoneyHelper.org.uk

MoneyHelper, from the Money and Pensions Service (MaPS), brings together the support and services of three government-backed financial guidance providers: Money Advice Service, The Pensions Advisory Service and Pension Wise. 

It offers free support on a wide range of financial matters, online and over the phone. This covers a variety of pension topics, including:

• Auto enrolment
• Building your retirement pot
• Pension problems
• Pension basics
• State Pension
• Taking your pension
• Tax and pensions
• Pensions and retirement

For more information visit moneyhelper.org.uk/en/pensions-and-retirement

Unbiased
Unbiased.co.uk  

For help with independent financial advice or finding IFAs in your local area.
 
Department for Work & Pensions:

www.gov.uk/government/organisations/department-for-work-pensions

www.gov.uk/browse/working

For information about pensions, tax and retirement planning.

If your pension savings in the RPS are greater than either the Annual Allowance (AA) or the Money Purchase Annual Allowance (MPAA), then we will send you a pension savings statement that will detail the benefits savings for the relevant period.

Your Annual Benefit Statement (ABS) will give you an indication of how much of the AA you have used in respect of your savings in the Scheme. You will need to factor in the amount of savings you have built up in any other pension schemes that you are a member of separately. 

You are responsible for reporting any excess in your pension savings over the Annual Allowance (AA) (after using up any carry forward) via self-assessment. 

The amount of AA charge will be included in your tax calculation and you would normally have to pay any charges by the usual self-assessment payment deadlines. You can pay the required tax charge either directly to HMRC or by using the Scheme Pays option, if you qualify for it.

For more information please check the Read as You Need guide.

The Scheme Administrator, Railpen, will tell HMRC that you have been sent a pension savings statement if your pension savings in the RPS exceed either the AA or the Money Purchase Annual Allowance (MPAA).

The decisions you make, must be right for your needs. Neither your employer, the scheme administrator, Railpen, nor the Trustee can give you financial advice. If you’re unsure about what to do, you may want to consider speaking to an Independent Financial Adviser (IFA) regulated by the Financial Conduct Authority.

Liverpool Victoria (LV) has been chosen as the preferred partner to give RPS members access to financial advice. They balance the cost and quality of advice. LV is regulated by the FCA, covers all areas of pension and financial advice and has a dedicated team, with specific knowledge on the Scheme. LV can be contacted on 0800 023 4187.

You can also choose your own Independent Financial Adviser (IFA). You can find IFAs in your local area on the Unbiased website.

Visit the guidance and advice page for more information.

The Lifetime Allowance (LTA) is the maximum amount you can save into all your pensions throughout your working life before you have to pay tax. The LTA for the tax year 6 April 2023 to 5 April 2024 is £1,073,100. 

The test against the LTA is usually carried out when you start taking your pension or pension pot. The test takes into account the value of all your pension savings and benefits, from every Scheme you are a member of, not just the RPS.

For defined benefit arrangements (such as the Shared Cost sections of the Railways Pension Scheme) the amount of LTA used is worked out using both your pension and any lump sum amounts. 

For defined contribution arrangements (such as the Industry-Wide Defined Contribution section of the Railways Pension Scheme), the value of your Personal Retirement Account is tested against the LTA at the time you take your benefits. 

You should be aware that from 6 April 2024, there is a limit of £268,275 on the amount you can take as a lump sum when you take your pension. This limit won’t affect you if you have Lifetime Allowance protections.

 You can learn more in the Lifetime Allowance Read as You Need guide and at gov.uk/tax-on-your-private-pension.

The Annual Allowance (AA) is a limit on the amount of your pension savings that can benefit from tax relief in any given tax year. If you exceed this limit, you may be charged tax on your pension savings that are over the AA. 

The most that you can save tax-free towards all your pension arrangements in a year (currently) is the lower of 100% of your earnings, or the amount the AA is set at for that tax year.

For most people, the AA is currently set at £60,000 (although this could change in the future).

If you’re a higher earner, you may be affected by the Tapered Annual Allowance. If you have taken money out of a defined contribution (DC) pot, such IWDC, BRASS or AVC Extra – you may be subject to the Money Purchase Annual Allowance.

You can find out more in the Read as You Need guide to Annual Allowance tax limits.

There’s no ‘typical’ scheme member who may be affected by the AA – this tax limit could potentially affect anyone who makes pension savings. However, there are circumstances that increase the likelihood of you exceeding the AA and, potentially, being subject to a tax charge. These include:

• ​ getting a high level of pay during the Pension Input Period
• ​ making a large additional contribution into your pension savings during the Pension Input Period

For more information about the Annual Allowance and how it works please check the Read as You Need guide