As a member of the IWDC Section, there are a number of ways you can take your pension pot (known as your Personal Retirement Account). One option is 'encashment', but what is encashment and how does it work?
Total encashment means taking all of your pension pot as a cash lump sum.
Select from the questions below to find out more.
How much you get will depend entirely on the value of your pot at the time you want to take it.
In the Railways Pension Scheme (RPS), there is only one option – you simply take your entire pot as a lump sum, all in one go. This is known as total encashment.
25% (but no more than £268,275) of your pension pot can be paid to you tax free. The rest of your pot would be taxed at normal income tax rates. The exact amount you’ll pay in tax will depend on the amount you are taking and the amount of any other taxable income you have already received in the tax year.
If you’d prefer to only take part of your pot as a cash lump sum, you can do so by taking a combination of different options. This could mean choosing to buy an annuity and/or taking your pot bit by bit (drawdown) with a new provider, before then taking part of your pot as a cash lump sum.
You can get instant access to all of the savings in your pension pot (Personal Retirement Account).
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 IFA. You can find an IFA in your area on the Unbiased website.
A range of planning tools is also available in your myRPS account to help you consider your options. For DC members this includes:
You can typically choose to take your pension pot as a cash lump sum from age 55. However, some members within the Railways Pension Scheme may have a Protected Pension Age. This allows them to take all of their pension pot as a cash lump sum from age 50. This does not apply to either drawdown or an annuity, which cannot be taken before age 55.
If you choose total encashment, you will need to let the Scheme administrator, Railpen, know that this is your preferred option.
If you’d prefer to only take part of your pot as cash, you would need to transfer your pot to a new provider.
Yes – if total encashment isn’t right for you, then you can consider: