Staying in work

If you take your benefits and plan to keep working - or go back to work - you may have important tax issues to think about if you haven't yet reached age 55.

Who is affected

This could affect you if you return to work for the same employer; a company in the same corporate group; or another employer you are connected to in the RPS, within:

• one month of retirement; or
• six months of retirement, if you returned to do a job which is not ‘materially different’ in nature.

In these situations, you would lose your Protected Pension Age for benefits in all sections of the RPS and HMRC would consider your benefits to be unauthorised payments, subject to a very high level of tax up to 70% until you reach 55. Depending on payment timings, this could affect your lump sum as well as your pension.

Who is not affected

The restriction wouldn't apply if you returned to work for a company not related to you or your previous employer, or if you return to your previous employer after the above timescales. If you take your benefits after age 55, there is no restriction on returning to work for any employer.

Contact

If you retire early and plan to return to work within the stated timescales, you must tell your Scheme administrator RPMI. This is because the Trustee doesn’t have the power to pay unauthorised payments without your permission, and the agreement of the Trustee and your former employer.

If you are under age 55, taking your benefits and thinking about returning to work, you must email RPMI at csu@rpmi.co.uk or tel: 0800 012 1117. When contacting RPMI, please quote your Pension Reference Number.

Financial advice

You should also seek independent financial advice about possible tax issues before you make a decision. Neither the Trustee, RPMI nor your employer can offer advice; nor should information provided by RPMI be relied on as advice about your individual circumstances.

Visit  unbiased.co.uk for a list of independent financial advisers in your area.