Find the answers to some of the most common, pension-related questions in these FAQs.
You might find it's already answered in these frequently asked questions (FAQs). They’re divided by subject to make it easier for you to find what you’re looking for.
A workplace pension is a way of saving for your retirement.
It is organised for you by your employer while you work for them.
It is sometimes called a ‘company pension’, an ‘occupational pension’ or a ‘works pension’.
If you’re a member of the Railways Pension Scheme (RPS), you’re in a workplace pension.
Whilst an active member you pay regular contributions into a workplace pension, your employer normally pays in too, and the government contributes with tax relief.
Your workplace pension is tax efficient, because the money you pay in is taken from your salary before tax is deducted, meaning you pay less tax on your salary.
It may also come with additional benefits, for example a tax-free lump sum could be paid to your loved ones if you die before claiming your workplace pension or if you die in service. Your dependants (usually family) may also get a pension.
You can find out more on the 10 things to know about pensions page.
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.
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:
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:
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.
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, 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:
For more information visit moneyhelper.org.uk/en/pensions-and-retirement
For help with independent financial advice or finding IFAs in your local area.
Department for Work & Pensions:
For information about pensions, tax and retirement planning.
You should register for myRPS if you haven't already done so.
We’re sorry you’re having trouble.
You can register using the following steps:
1. Visit the registration page and fill in your details including your:
4. Log in and create a final piece of memorable information. Don’t forget this as you’ll need it with your password each time you log in.
5. You will then be taken to your account dashboard. You’re in!
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:
Whether you join an AVC arrangement is up to you, but it may be something you want to consider if you:
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.
BRASS is the main Additional Voluntary Contribution (AVC) arrangement open to DB members of the Railways Pension Scheme (RPS).
You decide how much you want to pay in. AVCs are then taken from your pay before tax, so anything you pay into BRASS is tax free, up to certain limits. That means it’s a great way to boost your pension and save more for the future. You can find out more on the saving more with BRASS page.
When you join BRASS, you get a Personal Retirement Account (PRA). This is a pot of money held separately to your main DB pension with the Scheme. Your PRA is invested in a range of funds with the aim of helping it to grow over time. You can read more on the how investments work page.
When it’s time to take your pension, the value of your BRASS pot is added to your main Scheme benefits when you retire. Alternatively, you may be able to transfer your BRASS pot to another scheme in order to access other options. Information about these options is available on the taking my BRASS account page and in the Read as You Need guide on Transfer options.
If you pay the maximum to BRASS and still wish to contribute more, you can join another AVC arrangement, called AVC Extra.
For most Sections the most you can pay into BRASS each year is the higher of either:
You can find out more in the Read as you Need guide for BRASS members.
If you’re an active member, i.e. still paying in to your DB pension, you can get an estimate of the maximum you can pay into BRASS by using the BRASS maximum contribution calculator in your myRPS account. Your employer should be able to give you an exact figure.
If you’re a Network Rail member the rules are different. The most you can pay into BRASS is potentially up to 100% of your annual taxable earnings, minus your normal Scheme contributions. However there are limits on how much would qualify for tax relief automatically. You can read more in the separate Read as You Need guide for Network Rail members of BRASS.
You should also be mindful of your tax limits when considering how much to pay into BRASS. You can read more about the Annual and Lifetime Allowances in the relevant Read as You Need guides.
AVC Extra is an Additional Voluntary Contribution (AVC) arrangement. It is open to members who are already paying the maximum amount that you can pay into BRASS and still want to pay more.
This option is not available to members of the Network Rail section.
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.
Automatic enrolment is when an employee is made a member of a workplace pension scheme without needing to ask to be part of it.
In the past, it was often up to workers to decide whether they wanted to join their employer’s pension scheme.
But people are now living longer and spending many more years in retirement. Many aren’t saving enough to support themselves in later life.
So the Government took action and since 2012, employers have been gradually required to automatically enrol their eligible workers into a workplace pension scheme.
Someone who is:
If you earn less than the earnings threshold (currently £10,000) but above £6,240 a year (tax year 2022-23), you still have the right to join, even though it won’t happen automatically. In this case, you can ask to join and will still get the minimum level of employer contributions.
If you earn less than £6,240 you can ask your employer to give you access to a pension to save into. They arrange for you to join. But they don’t have to contribute to it.
If you are eligible, you will be automatically enrolled, but you can opt out.
However if you do opt out, you’ll lose out on your employer’s contribution to your pension, as well as the government’s contribution in the form of tax relief.
If you decide to opt out within a certain time of being enrolled (usually a month), any payments you’ve made into your pension pot during this time will be refunded to you.
After the first month, you can still opt out at any time. Whether you will receive a refund or other benefits will depend on your section’s rules. See the leaving the scheme page for DB members or the leaving the scheme page for IWDC members for more details.
You may be able re-join your employer’s workplace pension scheme at a later date if you want to.
As long as you still meet the eligibility criteria, by law, your employer must re-enrol you back into a scheme approximately every 3 years.
It isn’t unusual to have more than one pension. The one your employer will offer you includes contributions from them, so you should think carefully before opting out.
You can have as many pensions as you want to help you provide for your future, but the most that you can save tax-free towards all your pension arrangements, in any one tax year, is the lower of 100% of your earnings over that period and the Annual Allowance.
For more information and current AA limits please check the Read as You Need Guide.
No, you can have as many as you want to help you provide for your future, but you will only get tax relief if the total contributions are no more than 100% of your gross pay in any one tax year, up to an annual limit referred to as the Annual Allowance.
The Annual Allowance is currently £60,000 (although this could change in the future). Anyone whose taxable income is more than £200,000, and taxable income plus your pension savings for the year is greater than £260,000 will have a reduced Annual Allowance. This is known as the Tapered Annual Allowance.
Further information is available in the Annual Allowance Read as You Need guide.
If you are a member of a defined benefit (DB) scheme, the Annual Allowance limit for tax relief is based on benefits earned rather than contributions paid.
Your employer must provide a pension scheme that meets minimum quality criteria which differ between DC and DB pension schemes.
The minimum requirements for DC occupational pension schemes are based on total amount that has to be contributed by you, your employer, and the government (in the form of tax relief). These minimums are generally 5% (which includes tax relief) from you and 3% from your employer.
The minimum requirements for DB pension schemes are usually based on the benefits to which an eligible member is entitled under the pension scheme at retirement or the cost of providing those benefits.
Your employer will make it clear in their communications with you the minimum you must pay in. They’ll also let you know how much they will pay in as well.
The advantage of being enrolled into a workplace pension scheme, such as the RPS, is that you don’t need to do much at all. Your employer sorts out payments from your salary and ensures you get the tax-relief you’re entitled to. All we would encourage you to do is to make sure you understand your pension and stay involved.
You can do this by registering and/or logging in to your myRPS account and exploring the information and options available to you. This includes completing a Nomination to let the Trustee know who you would like to receive any lump-sum death benefit if you die before your start taking your benefits.
If you are auto-enrolled into the Industry-Wide Defined Contribution (IWDC) section of the RPS, or decide to start paying Additional Voluntary Contributions (AVCs) you may want to choose which funds you invest your contributions in. You can manage your own funds if you want to – or you can opt to have them managed for you in a way that is considered suitable for a typical member.
If you change job:
If you stop making payments into your previous pension, remember to make a note of its full name and what dates you were a member, so you can trace it in later life and let them know if you change address so they can keep in touch with you.
The great thing about auto-enrolment is if you decide it isn’t right for you now, you will be automatically enrolled back in later (usually every 3years) – giving you another chance to start saving for your future.
You may also be able to opt in by giving your employer an ‘opt-in’ notice.
If you decide to leave, as long as it is within the opt-out period, any payments you have made will be refunded to you as if you had never been a member.
If you leave after the opt-out period, whether you will be entitled to a refund or not will depend on how long you have been a member and your scheme rules. If you’re not eligible for a refund, the money you have put into your pension will be kept safe until you are ready to take it.
As a defined benefit member (DB) of the Scheme, your death benefits could include:
You can read more about death benefits and how they are paid on the reporting a death page and in your Member Guide.
A lump-sum death benefit may be payable if you are contributing to the IWDC Section and are employed by a participating employer. This amount is based on your death benefit pay and will be paid to your beneficiaries or to your estate at the Trustee's discretion. In addition, the value of your Personal Retirement Account (PRA) will be paid to your beneficiaries.
If you die after leaving service or opting-out, but before you have taken your benefits, the value of your Personal Retirement Account will be paid to your beneficiaries at the Trustee's discretion. It’s important that the Trustee understands who you want to receive the lump-sum death benefit and completing your Nomination form is the way to do this.
You can complete your Nomination form quickly and easily online by logging in or registering for myRPS.
You can read more about death benefits and how they are paid on the reporting a death page and in your Member Guide.
Who gets your death benefits (and the remaining value of your PRA if you’re an IWDC member) is at the discretion of the Trustee. However you can let them know who you think it should be paid to by making a nomination. This can be done quickly and easily by logging in to your myRPS account. You should check and update your nominations regularly.
If you’re a DB member your death benefits could also include regular pension payments for a spouse, civil partner, dependent or child. These are laid out in the Scheme rules and defined as follows:
An eligible spouse
This is your husband, wife or partner in a civil partnership who you were living with at the time of your death.
A legal spouse
This is your husband, wife or your partner in a civil partnership, even if you are not living together at the time of your death.
These are adults who have been fully or largely dependent on you financially, for the 2 years immediately prior to your death (up to a maximum of 3 people).
This covers the 2 youngest eligible children who normally receive pensions until they are 18 years old. If your child is disabled or in full-time education, the pension may still be paid after the age of 18 if the Trustee or your Pensions Committee agrees. This could extend up to the age of 23 for students in full-time education or for life, if your children are disabled.
You can read more about death benefits and how they are paid on the reporting a death page and in your Member Guide.
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:
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.
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:
If you are suffering from ill health you may be able to take your pension pot before your Normal Minimum Pension Age.
For this to be possible, the Trustee must receive medical evidence from a registered practitioner that you are, and will continue to be, unable to do your job.
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 pot as a lump sum. Please get in touch with the Scheme administrator, Railpen, for more information.
If you’re going through a divorce or the dissolution of a civil partnership, your pension is likely to be considered along with your other assets when financial settlements are worked out.
A court order can be made to apportion or transfer part of your pension benefits to your ex-spouse or ex-civil partner. In this case your own pension would reduce as a result.
You can find out about the main types of court order relating to divorce and dissolution, and what they mean for your pension on the Divorce and my pension page and in the Read as You Need guide on divorce.
A Cash Equivalent Transfer Value (CETV) is a way of putting a value on your pension benefits, which can be used by the Court in financial settlements during divorce or dissolution of a civil partnership.
It takes into account:
For security reasons we can only provide a CETV to
There is an administration charge for any CETV. You can find out more in the Read as You Need guide on divorce.
If the Court issues a Pension Attachment order, the amount allocated to your ex-spouse will be held within the Scheme and will only be paid once you start taking your benefits. Any estimate you get from the Scheme, will take this into account so you’ll always see an accurate estimate of what your pension is worth to you. The order may provide for the amount allocated to be re-instated to you on the death or re-marriage of your ex-spouse.
If the Court issues a Pension Sharing Order, your benefits will be reduced and a one off payment, specified by the Court, will be transferred to a scheme chosen by your ex-partner at the time of the divorce. We will let you know when this has been done and what your basic scheme pension and lump sum has been reduced by. All future estimates of your benefits that you receive from Railpen will take this into account and reflect the reduction. They will be unaffected by any subsequent re-marriage or death of your ex-spouse.
We upload a payment calendar every year which shows the dates your pension will be paid into your bank or building society. For more information or to get the calendar, visit the pension payments page.
Your pension will be paid into your bank or building society account. It is paid, in arrears, every 4 weeks. In some circumstances it is paid annually. For more information visit the pension payments page.
Please let the Scheme administrator, Railpen, know about any changes to your account at least one week before your pension is due to be paid.
If you are unable to give enough notice, make sure you keep your old bank account open to avoid any delay in your pension reaching you.
The quickest and easiest way to change your bank account or building society details is to log in to myRPS. Go to Bank Details under My Details and make your changes.
Alternatively, telephone the Helpline on 0800 012 1117 or email firstname.lastname@example.org. When contacting Railpen via phone or email, remember to quote your pension reference number. This can be found on any recent letters we’ve sent you.If you live outside the UK, you’ll need to fill in a form for the country you live in.
You can find the forms arranged alphabetically by county on the updating my details page.
Your railways pension is reviewed every year.
It increases in line with orders published by the government, and matched to the Consumer Prices Index (CPI) figure from the previous September. Any increase is usually effective from the first Monday in April on or after 6th April (the start of the financial year).
Unless your section rules specify otherwise you will receive the full increase but this will also depend on when you took your benefits or became a preserved pensioner.
If you are a man aged over 65 or a woman over the age of 60, a different level of pension increase may apply for the part (if any) of your pension which is referred to as Guaranteed Minimum Pension (GMP).
We’ll let you know the rate of pension increase in each spring issue of the Penfriend newsletter and on the pension increase page.
You will also get a letter telling you what your new individual pension amount is.
You will also receive a statement every time the net amount of your pension payment changes by more than £2 a payment. This usually happens when the Chancellor of the Exchequer alters tax rates or allowances in the Budget, or your tax code changes because of your personal circumstances.
Your pension is taxable like any other income within the Pay As You Earn scheme. Tax is taken from your pension payment before you receive it, based on the tax code supplied to the scheme administrator, Railpen, by the Tax Office.
Any enquiries regarding your tax code should be made directly to your appropriate Tax Office.
This is because we have been instructed by Inland Revenue to change your tax code.For further information about tax codes and what to do if you think yours is wrong, visit gov.uk/tax-codes
After the end of the tax year in April, Railpen will send you a P60 form. The P60 confirms your final tax code for the year and gives details for the tax year that has just ended of:
Your P60 is important. You need to keep it for at least 2 years in case you’re asked to complete a tax return (it may help you with other forms too).
A copy of your P60 can be found by logging in to your myRPS account.
Possibly — permission from your employer may be required, but this will depend on your Section's rules and your age.
You can find more information on the working after I take my pension page
Your pension stops at the end of the 4-week period in which you die.
Any overpayment will be balanced against your spouse's pension or recovered from your estate.
As a defined benefit (DB) member, the following death benefits may be payable:
The amount paid out will depend on how much you have taken from your pension, including any lump sum you took at the start.
If you have been receiving your pension for more than 5 years, it is unlikely that any lump sum will be payable.
You can find more information on the my pension when I die page on in your Member Guide.
When you die, your spouse or civil partner could be paid around half of your normal pension.
Your normal pension is the basic pension on the day you started taking your pension. This will be increased by any pension increases which have been made since that time.
Your normal pension does not include any voluntary reduction or increase of your pension which you chose at the time you retired. These reductions could be exchanging pension for cash, taking the level pension option, or swapping part of your pension for an additional dependant's pension (which would be paid in addition to half of your normal pension).
You can find more information on the my pension when I die page.
If you're a defined benefit (DB) member this is only allowed by a small number of Sections and will depend on your employer’s policy, so you may need to discuss it directly with them.
If you're an IWDC member you can usually transfer in without restriction. However, you may need to get the permission of the scheme you are transferring your benefits from.
You can find out more about transferring benefits into the RPS on the find out more about transferring benefits into the RPS on the transferring in or out page.
You may be able to transfer benefits from another RPS section into your new employer’s section. This is known as an Inter-scheme transfer. To do this you will need to complete the Inter scheme transfer request form. A transfer will not happen automatically if you decide to change employers, even if your previous employer was also part of the Railways Pension Scheme, or part of the same owning group as your new employer.You can find out more about transferring benefits into the RPS on the transferring in or out page.
Yes. As long as you get the permission of the scheme you are transferring your benefits from.
If you are eligible for a transfer in, you can start the process in myRPS under My PRA.
Yes, you can transfer your benefits out of the Railways Pension Scheme (RPS) to another scheme or provider, if you wish. However, it must be to an arrangement which is registered with HMRC.
You should also think very carefully before you transfer your pension to another provider and consider that a transfer may not be in your best interest.
Consider your long-term financial position and what you want your pension to support in the future. You should carefully compare the benefits of your RPS pension with those offered by alternative personal pension plans or any other arrangements.
If you want to transfer your pension to a defined contribution (DC) arrangement, you may be required by law to get financial advice. Visit the guidance and advice page for details on where to get help and support.
Be aware that pension transfers are one of the main routes being used by pension scammers. If you fall prey to these fraudsters, you could lose your entire pension savings and be asked to pay a large tax bill too. You can find out more on the pension scams page or via The Pension Regulator’s (TPR) website.
Once complete, a transfer is permanent and cannot normally be reversed at a later date, so please think carefully before going ahead.
Check the transfer options Read as You Need guide for DB members for more detailed information.
You can also visit the transferring my pension page for a summary of things to bear in mind.
Yes if you and your employer are no longer paying into your IWDC Section and the receiving scheme or provider is able to accept the transfer.
If you are thinking of transferring your pension, you may be at increased risk of scams. Check the pension scams page for things to look out for and steps you can take to protect your pension savings.
You may also want to consider taking financial advice before making a transfer. Check the guidance and advice page for more information.
If you’re aged 50 or over and have a DC pension pot you can also book a Pension Wise appointment for guidance on your options. Visit moneyhelper.org to find out more or to book.
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 may be affected by the Tapered Annual Allowance if your taxable income is more than £200,000 (this includes income from non-employment sources).
If you have an adjusted income over £260,000, then your Annual Allowance will reduce by £1 for every £2 of adjusted income over £260,000.
For this purpose, your adjusted income is your taxable income plus your level of pension savings for AA purposes (called your ‘Pension Input Amount’).
The current maximum reduction to the Annual Allowance is £50,000 so if you have an adjusted income of £360,000 or more, you would have an Annual Allowance of £10,000.
You can find out more about the Tapered Annual Allowance in the Read as You Need guide to Annual Allowance tax limits.
If you take money from a defined contribution arrangement, such as your IWDC pension pot or Additional Voluntary Contributions (AVCs) in BRASS or AVC Extra, this could trigger a lower Annual Allowance, known as the Money Purchase Allowance. For example it might apply if you move your pension pot money into an income drawdown fund and start to take an income. The MPAA is currently £10,000.
You can find out more about the Money Purchase Allowance in the Read as You Need guide to Annual Allowance tax limits.
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.
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:
For more information about the Annual Allowance and how it works, please check the Read as You Need guide.
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).
For the purpose of the Annual Allowance, the growth in your pension savings is measured over a Pension Input Period. This runs from 6 April to 5 April in line with the tax year.
For DB members: the increase in your benefits is worked out by taking the value of your pension and any lump sum at the start and end of the Pension Input Period. The difference, in excess of Consumer Prices Index (CPI) inflation, between the two amounts represents the growth in your benefits over the period. The growth in your scheme pension is multiplied by a factor of 16 and the growth in your scheme lump sum is then added to this figure. The total is known as your Pension Input Amount. If you pay Additional Voluntary Contribution (AVC) into BRASS or AVC Extra, these also count towards the Annual Allowance amount but on a different basis because both BRASS and AVC Extra are treated as defined contribution arrangements.
For IWDC members: your Pension Input Amount is simply the total of contributions paid into the IWDC section during the tax year, including those paid by you, your employer and anyone else. This figure would be adjusted if you had, for example, transferred existing savings from another pension arrangement into the IWDC section. It does not include any investment returns.
The Annual Allowance limit applies to all pension savings that you may have, not just those in the RPS. So, if you have any other pension savings, you will also need to find out how much they have grown, then add all of them together to get a full Pension Input Amount, before you can do the check against the Annual Allowance.
Please check the Read as You Need guide for more details on the Annual Allowance and examples of how the Pension Input Amount is calculated. You can also visit the HMRC website for more help with your personal tax calculations.
You can carry forward any Annual Allowance (AA) that you have not used from the previous 3 tax years. This can then be added to your current year's AA to give you a higher allowance for tax-free pension savings.
This rule may allow you to make occasional large amounts of pension savings without having to pay an AA charge.
The 3-year carry forward rule applies if you are subject to the standard AA or the Tapered Annual Allowance (TAA). It does not apply directly if you are subject to the Money Purchase Annual Allowance (MPAA).
You can find out more about the 3-year carry forward rule in the Read as You Need guide to Annual Allowance tax limits.
If your total pension savings are worth more than the LTA, then you may have to pay tax on any amount above the LTA. The amount of tax you owe will depend on your income tax rate, rather than the LTA charge that was in place before 5 April 2023.
You can get more information and see some examples of how the calculations are done in the Lifetime Allowance Read as You Need guide
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.