Whether you're thinking of joining the Scheme, or want to understand more about pensions, here are some invaluable insights from real-life members who are either still working or enjoying their retirement.
Now retired, Derek held senior operational and safety management positions in the railway industry, both in the UK and overseas.
I joined the Scheme soon after starting on British Rail back in 1967.
To begin with, being young and not thinking too much about getting old, I wanted to have money then, but some older railwaymen counselled me into being aware of the benefits. We had no financial advisers in those days.
The Scheme itself offered one of the best pensions around, what with four times your salary if death occurs in service, and the final salary scheme paid 2/3rds of your salary. When BRASS came out, I joined that and then later BRASS 2, as that would add even more to my final pension pot using Additional Voluntary Contributions (AVCs).
I had dreamed of retiring at 50, but when I got there, I realised I was too young to finish! I was fortunate enough to take voluntary redundancy in 1997, and used some of that money to buy more years in the pension fund, thus building up the amount I could take as a pension later.
I opted for the level-pension option and a larger lump sum when I took my pension, mainly because I wanted to ensure I got something out of my pension pot at a time when pension schemes elsewhere were being raided to fund restructuring initiatives, and also I didn’t know how long I would be drawing it – better in my pocket then elsewhere.
Now that I am retired, I am glad that I had the foresight to look forward to retiring early and planning for it. Given that the State pension age has shot up in recent years and is continuing to do so, it is even more important to plan ahead as it is becoming much harder for anyone to consider early retirement.
In my retirement, I can now do and enjoy many things. I'm a Trustee with Age UK, take part in local hospice and community work and am also a police volunteer. I enjoy world cruises of 3-4 months' duration, and also use my protected free travel a lot.
I would say definitely join the pension scheme and plan for the future! By all means take financial advice, but PLAN, PLAN, PLAN!
Derek has kindly contributed this case study as a personal viewpoint of the RPS. Please note that neither the Trustee, your employer nor Railpen can offer financial advice. It is strongly recommended that you seek independent financial advice before making any decisions about your pensions or retirement planning.
A member of the Bombardier Transportation (Signal) UK Section since May 2001.
The Scheme has a number of main benefits for me, namely:
I hope to retire at the age of 55 when my wife can also take her pension and our son has finished his education, and plan to spend my retirement flying my plane, skiing and rock climbing. I might also try to restore some classic cars!
What would I say to a new member or someone who is thinking of joining? Well, I would tell them to look very carefully at the new government pension regulations (see www.gov.uk for details).
Also, while the Scheme’s defined benefits are as good as you’ll get, you might also want to think about how you invest your AVCs if you want to top up your contributions.
Investments are a very complex topic that can be difficult to unravel, especially when you’re at the start of your career, so it’s always important to take independent financial advice first.
But I think it’s a very good idea to invest regularly in a tax-efficient arrangement and the RPS offers this with reasonable benefits.
Kevin has kindly contributed this case study as a personal viewpoint of the RPS. Please note that neither the Trustee, your employer nor Railpen can offer financial advice. It is strongly recommended that you seek independent financial advice before making any decisions about your pensions or retirement planning.
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