As a member of the IWDC Section, there are different ways you can take your pension pot (known as your Personal Retirement Account). One option is to use 'drawdown'. But what is drawdown and how does it work?
A drawdown is basically a flexible income. Your IWDC pot (known as your Personal Retirement Account or PRA) remains invested in funds specifically designed for that purpose. You take out cash (drawdown on your pot) whenever you want to, until your pot runs out.
Select from the following topics to find out more.
How much you get with drawdown, depends on:
There are two main types of drawdown available:
You may wish to speak to an Independent Financial Adviser (IFA) before making any final decisions.
Liverpool Victoria (LV) has been chosen as the official partner to give Railways Pension Scheme members access to financial advice. LV can be contacted on 0800 023 4187.
You are still free to choose your own Independent Financial Adviser (IFA). You can find an IFA in your area on the Unbiased website.
A range of planning tools are also available in your myRPS account to help you consider your options. For DC members this includes:
The Railways Pension Scheme (RPS) does not offer a drawdown facility directly.
If you're considering this option, you will need to transfer money from your IWDC pot to another provider that provides drawdown options.
The Trustee has appointed Legal and General Investment Management (LGIM) to offer members access to a drawdown facility.
As the Railways Pension Scheme does not offer drawdown directly, the partnership with LGIM means members who are considering drawdown can access a high-quality arrangement, with preferential fees that are not available elsewhere.
When you retire, a drawdown arrangement will allow you to take out cash whenever you want to, up until your pot runs out. In the meantime, the rest of your money remains invested in funds specifically designed for that purpose until your pot runs out.
With LGIM, you have a range of options for your investment funds.
The default option is LGIM’s flagship product, the Retirement Income Multi Asset (RIMA) Fund.
This has been specially designed for the long term, and to protect members from any downturn in investment performance.
It costs 0.66% to invest in RIMA, including an annual management charge of 0.35% and a fund management charge of 0.31%.
We understand these fees may appear a little higher than other competitors on the market. If you prefer to look elsewhere, make sure you are comparing like for like in terms of administration fees, as well as investment fund charges and performances. For example some funds are not actively managed so can be offered cheaper but may not perform as well. When choosing a provider you should also be aware of hidden charges, such as administration fees for switching funds.
If you don’t select a fund, or actively chose not to, then your investments will automatically default into RIMA.
If you would prefer to make your own investment choices, LGIM has a number of options available. This includes some cheaper alternatives, as well as some that are passively managed. If you select a fund other than RIMA, fees will differ from those quoted above.
LGIM was chosen as the preferred drawdown option for members, following a detailed selection process. You are still free to shop around with other providers.
A range of planning tools are available in your myRPS account to help you consider your options. This includes:
You may also wish to speak to an Independent Financial Adviser (IFA) before making any final decisions.
Liverpool Victoria (LV) has been chosen as the official partner to give RPS members access to financial advice. LV can be contacted on 0800 023 4187. You are still free to choose your own Independent Financial Adviser (IFA). You can find an IFA in your area on the Unbiased website.
Learn more about the other options available to you in retirement using the links below.
Whenever you take money from your IWDC pot, and whichever option you choose, you should always be aware of the risk of scams and proceed with caution. Find out how to protect yourself on the scams page.
Yes – if drawdown isn't right for you, then you can consider: