Blog
A deep-dive into a variety of pension topics to help you understand and learn more about your pension and the Scheme.
Our blogs will give you information, tips, insights and guidance to help you get to know your pension and support you on your journey to retirement.
26/4/2023
Editorial
<p>With the start of the new financial year and the announcements in the Spring Budget, it seems timely to give members a bit of a re-fresher on tax fundamentals. From tax relief - to all of the tax allowances that apply in different situations and making the most of them all – we have it all covered in the next few lines. <br></p><h2>Tax relief on your pension – what is it? </h2><p>When you save for retirement via a pension, some of the money that would normally have gone to the government in tax from your wages, goes towards your pension instead. This is known as tax relief. It increases your savings and can be a substantial amount if it’s saved over many years. <br></p><p>Here’s an example. If you’re a basic-rate taxpayer and want to save £100 into your pension, because of the way tax relief works it will actually only cost you £80. The other £20 comes from the tax relief.<br><br></p><h2>There’s a limit to how much tax relief you can get</h2><p>While you can put as much money as you want into your pension, there are limits on the amount of pension savings that can benefit from tax relief each year and over your lifetime. These amounts are set by the government and may vary at the start of each financial year in April. <br></p><p>A few major pension-related changes were announced on 15 March when Chancellor of the Exchequer Jeremy Hunt presented his Spring Budget. <br></p><p>The main headlines were changes to the amount of tax-free savings members can make each year (the ‘Annual Allowance’) and over their lifetime (the ‘Lifetime Allowance’).<br><br></p><h2>Limits and tax allowances that could affect RPS members</h2><p>Find below a breakdown of the tax allowances that apply to pension savers and further information on the changes that were introduced to them in the Spring Budget. <br></p><p>The main tax allowance affecting members of the RPS who are in a defined benefit (DB) arrangement is the Annual Allowance, but there are other allowances that could apply too. </p><p> </p><h3>Annual Allowance </h3><p>The Annual Allowance (AA) is the limit on your pension savings in a single tax year before you need to pay a tax charge. For the year 2023/2024, this limit is either 100% of your annual earnings, or £60,000 (previously £40,000), whichever is lower. <br></p><p>If you want to consider whether your pension savings will exceed the Annual Allowance, you need to understand how increases in your pension savings are worked out. It’s not as simple as just knowing how much you’ve paid in. You can find out more in the <a target="_blank" href="https://cdn.rpmi.co.uk/mp-sitefinity-prod/docs/default-source/rayn/guides-for-all-members/annual-allowance-tax-limits.pdf?sfvrsn=d6e4ef2d_16">Annual Allowance Read as you Need guide</a> <br></p><p>If you pay Additional Voluntary Contributions (AVC) to BRASS or AVC Extra, these also count towards your Annual Allowance. However, they are considered on a slightly different basis because they are classed as defined contribution (DC) arrangements. </p><p> </p><h3>Money Purchase Annual Allowance </h3><p>The Money Purchase Annual Allowance is a limit on the amount of tax-free pension savings you can make into a defined contribution (DC) pension arrangement. It would only affect you if you take savings from a defined contribution arrangement (which includes Additional Voluntary Contributions) in certain ways. <br></p><p>If you have a DB pension but you pay AVCs (BRASS or AVC Extra) and you start taking money from your AVCs, the amount you can continue paying into your pension and still get tax relief may reduce. This is because AVCs are classed as DC not DB, because they get invested in.<br></p><p>This is known as the Money Purchase Allowance (MPAA). The MPAA will be set at £10,000 (used to be £4,000) from 6 April. <br></p><p>If you start taking money from a DC arrangement and trigger the MPAA, the administrator or scheme manager will send you a flexible access statement to show you have triggered the MPAA. You must then send that statement to schemes where you are still actively accruing benefits. <br></p><p>You can check if you’ve gone above the MPAA using a simple tool on the <a href="https://www.gov.uk/guidance/work-out-your-allowances-if-youve-flexibly-accessed-your-pension" data-sf-ec-immutable="">government’s website</a>. <br></p><p>More information on the MPAA is available in your <a target="_blank" href="https://cdn.rpmi.co.uk/mp-sitefinity-prod/docs/default-source/rayn/guides-for-all-members/annual-allowance-tax-limits.pdf?sfvrsn=d6e4ef2d_16">Read as you Need guide</a>. </p><h3> </h3><h3>Tapered Annual Allowance </h3><p>The Tapered Annual Allowance (TAA) generally applies to those on the highest incomes. This allowance gradually reduces the amount you can save into your pension plan annually depending on your income. It may affect you if your income is over £260,000 (previously £240,000) from 6 April 2023. </p><p> </p><h3>Lifetime Allowance </h3><p>The Lifetime Allowance (LTA) is the limit on the total amount of pension savings you can make in your lifetime without having to pay tax when you come to claim them. If your savings have exceeded the limit, you’d need to pay a tax charge on any amount over the allowance. The LTA limit has been frozen at £1,073,100 and it was announced 2 years ago that it won’t be changed until 2026. <br></p><p>It was, however, announced last month that the LTA will be abolished completely from 6 April 2023. This means that no one will face a LTA tax charge with the start of the new financial year. <br></p><p>As a result of the abolition of the LTA, the maximum amount most members can take as a lump sum will be frozen at £268,275, which is 25% of the current standard lifetime allowance of £1,073,100. However, members with a protected right to a higher lump sum on 5 April 2023 will continue to be able to access this right.</p><p><br></p><h2>How will I know if I’ve exceeded my allowances? </h2><p>If your pension savings in the RPS are greater than either the AA, or the MPAA, then we will send you a Pension Savings Statement (PSS). This will show how much of your allowance you have used. <br></p><p>You can apply to carry forward any AA that you haven’t used from the previous 3 years to the current tax year. However, no carry-forward is available for MPAA. </p><p> </p><h2>Making the most of your allowances</h2><p>With the challenging financial times we are all facing, making the most of your tax limits may not be a priority at the moment. Everyone’s situation is different, though, and it’s always helpful to know your options in case spending a little more towards your pension seems like a logical step. To get the most out of your limits, you might want to consider paying in as much as you can before the tax year is up. This doesn’t necessarily mean paying in the full allowance but paying in as much as you are able to at the time. </p><p> </p><h2>Enhance your understanding of the topic of tax</h2><p>You can find more details in our online <a href="/knowledge-hub/help-and-support/RAYN">Read as you Need guides</a>, as well as a <a href="/knowledge-hub/help-and-support/video-library">series of short videos</a>. <br></p><p>For more information on pension tax relief, check out the <a href="https://www.moneyhelper.org.uk/en" data-sf-ec-immutable="">Money Helper website</a> or try the <a href="https://www.which.co.uk/money/pensions-and-retirement/pensions-and-retirement-calculators/pension-tax-calculator-avRmf8S2yxd1" data-sf-ec-immutable="">Which? pension tax relief calculator</a>. It shows you how much tax relief you get based on your pension contributions.</p><p> </p><p><em> </em></p><p><em>We will be updating our website content and guides over the coming months to reflect the changes announced as part of the Spring Budget 2023, so please refer to this blog or </em> <a href="https://member.railwayspensions.co.uk/knowledge-hub/news-and-views/news-updates/2023/03/15/spring-budget-announcements" data-sf-ec-immutable="" data-sf-marked=""><em>this news article</em></a><em> in the meantime for the 2023-24 tax year figures.</em></p>
Learn more about the fundamentals when it comes to tax and your pension.
11/4/2023
Editorial
<p>The Trustee has issued a comprehensive response to The Pensions Regulator’s (TPR) recent consultation package on its draft funding Code of Practice for defined benefit (DB) pension schemes. TPR is consulting based on its interpretation of how trustees can comply with the legislative requirements set out in the Pension Schemes Act 2021 and the proposed draft regulations that the Department for Work and Pensions (DWP) consulted on in 2022 (the Trustee’s full response to that consultation can be found <a href="https://member.railwayspensions.co.uk/knowledge-hub/news-and-views/blog/rps-blog/2022/11/14/trustee-responds-to-dwp-consultation" target="_blank" data-sf-ec-immutable="" data-sf-marked="">here</a>).</p><p>The Trustee notes that most of the draft Code of Practice serves as welcome detail since the DWP consulted on its draft regulations last year. However, the Trustee feels there are still a number of areas where the draft regulations, and/or the draft Code of Practice, may lead to unintended negative consequences for DB schemes and their members. The covering note to the Trustee’s response highlights several key concerns.</p><p>The Trustee believes that it is essential that the new funding regime allows members to continue to build up affordable and sustainable DB pensions, and that it remains able to pay these benefits over the long term.</p><p>Through its response to these consultations and its extensive engagement with TPR, the DWP, and a wide range of other industry stakeholders, the Trustee is aiming to support TPR and the DWP in developing solutions that work for the wide range of DB schemes in the UK, including open schemes.</p><p>The Trustee and Railpen will continue to engage with the DWP and TPR in the months ahead, to try to ensure that the final regulations and Code of Practice are as helpful as possible, and serve the best interests of our members. </p><p><span style="text-decoration: underline"><a data-sf-ec-immutable=""></a><a target="_blank" href="https://cdn.rpmi.co.uk/mp-sitefinity-prod/docs/default-source/default-document-library/rptcl---response-to-db-funding-code-consultation.pdf?sfvrsn=f8e12420_1">Read the Trustee’s full response to the consultation.</a></span></p><div><div><div id="_com_1"><p> </p></div></div></div><p><span style="text-decoration: underline"><a data-sf-ec-immutable=""> </a></span></p>
Read the Trustee's response to The Pensions Regulator's consultation on a draft funding Code of Practice for DB pension schemes.
2/4/2023
Editorial
<h1>1. What is a pension?</h1><p>A pension is a savings plan to provide income for when you retire. There are tax advantages compared with other types of savings. There are 3 main types of pension:</p><h3>1 Workplace pension</h3><p>A workplace pension is set up by your employer to help you save for retirement. It’s also sometimes known as an occupational pension. You pay regular contributions, your employer normally pays in too, and the government contributes with tax relief. So it’s a great benefit to have. The Railways Pension Scheme (RPS) is a workplace pension.</p><h3>2 Private pension</h3><p>This is arranged privately by you. You set up regular contributions and the government adds tax relief.</p><h3>3 State Pension</h3><p><strong></strong>This is a regular payment from the government once you reach State Pension Age. Eligibility depends on your National Insurance record. Even if you can get State pension, on its own, it may not provide you with enough income to live on comfortably in retirement. </p><p>Your RPS workplace pension is likely to be one of 2 types:</p><h3>1 Defined benefit (DB)</h3><p>The Railways Pension Scheme (RPS) Shared Cost Sections are defined benefit sections.</p><p>A defined benefit (DB) scheme pays you a retirement income based on your salary and how long you’ve been a member of the scheme, rather than on the amount of money you’ve contributed to the pension. </p><p>The RPS Defined Benefit Sections are mostly ‘final salary’ schemes and give you a guaranteed annual income for life, based on your final or final average salary. </p><h3>2 Defined contribution (DC)</h3><p>A defined contribution (DC) scheme builds up a pension pot to be used in retirement. The size of the pot will largely depend on how much you and/or your employer contribute and how much this grows through investment returns. The Industry-Wide Defined Contribution section (IWDC) of the RPS is a DC scheme. </p><p>You can find out which type of pension you have if you log in (or register) to your myRPS account and select ‘My pension’ and then ‘Membership details’ in your home page.</p><p>A group of employer and member elected representatives, known as “The Trustee”, oversees the management of the scheme including collecting contributions and paying benefits. The Trustee regularly checks that the Scheme is being managed in line with their expectations and keeps you informed via your pension administrator, Railpen. If you’d like to find out more about the Trustee, go to <a href="/knowledge-hub/the-trustee">The Trustee</a>. </p><h1>2. Why pay into a workplace pension?</h1><p>Workplace pensions have many important advantages over other saving schemes that will make your savings grow quicker. Here are some of them: </p><h3>Your employer contributes too<strong> </strong></h3><p>What sets a workplace pension apart from a personal pension and other saving options is that your employer normally contributes too.</p><h3>You get tax relief<strong> </strong></h3><p>Another key benefit of a pension plan over other savings plans is tax relief. This tax relief is given based on the rate of income tax that you pay. In the RPS your pension contributions are deducted before you are taxed. You will usually therefore pay less tax because your tax will be calculated based on a lower amount of UK earnings.</p><h3> Help with managing your Railways Pension Scheme</h3><p>On the RPS website you have 24 hour access to free, online, award-winning support and guidance.</p><p>You have a dedicated member website with access to a myRPS online account where you can view all your membership and pension information in one place, edit your details, request estimates and access the easy pension calculation tools. If you’re a member of the RPS, you can easily <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">log in and/or register</a><span style="text-decoration: underline">.</span></p><p>If you’re an active member, you’ll receive two newsletters a year, packed with information to keep you up-to-date with the Scheme, pension and tax law and give you tips to help you achieve the retirement outcome you hope for.</p><h3>And there’s more</h3><p>A tax-free lump sum of money could be paid to your loved ones if you die before claiming your pension or if you die in service. Check your section's Member Guide for details. You can tell the Trustees who you would like to receive this by completing a Nomination form. You can do this if you <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">log in and/or register</a>, then go to ‘My Nominations’ under the ‘My Pension’ section on your home page. Your dependants (usually family) may also get a pension. </p><h1>3. Your investments – how it works with the RPS</h1><p>What options and how your funds are invested will depend on the type of scheme you are in.</p><h3>DB investments</h3><p>If you have a defined benefit (DB) pension, your contributions are combined into a range of carefully selected, pooled investment funds, so they benefit from economies of scale. DB contributions are invested to help pay members benefits but the DB investment performance does not influence what a DB member will get in retirement. Your benefits are typically based on your final pensionable salary over your last year of service and the amount of pensionable service you have at retirement.</p><h3>DC investments</h3><p>If you have a DC pension, if you wish, you can choose and manage your own pension investments from a range of carefully selected options. Or you can have your pension contributions invested for you in a way that is considered suitable for a typical member. You can change your investment choices at any time by <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">registering or logging in</a> to your myRPS account.</p><h3>AVC and BRASS investments</h3><p>With these additional contributions, (see 5 below), you have similar investment choices to DC investments. The Trustee, supported by Railpen’s investment and risk experts, makes careful decisions about the strategies and funds available, aiming to achieve the best outcomes for members. </p><h1>4. Tax relief, tax allowances and your pension</h1><p>The great advantage of saving for retirement via a pension, is that some of the money that would normally have gone to the government in tax, goes towards your pension instead and increases your savings. This can be a large amount if it’s saved over many years. </p><p>You can put as much money as you want into your pension but there are certain limits on the amount you put in which can affect the amount of tax relief you're allowed. If you exceed these limits, you may have to pay a tax charge after all, so it’s worth knowing what they are. </p><p><strong>A brief guide to tax allowances affecting pension savings </strong></p><ul><li> The <strong>Annual Allowance</strong> (<strong>AA)</strong> is the limit on your pension savings in a single tax year before you need to pay a tax charge. For this tax year 2023/2024, for most people, this limit is either 100% of your annual earnings, or £60,000, whichever is lower. You can apply to carry forward any AA that you haven’t used from the previous 3 tax years to the current tax year. <a href="https://member.railwayspensions.co.uk/knowledge-hub/help-and-support/RAYN" data-sf-ec-immutable="" data-sf-marked="">Go to the Read as You Need guides on tax allowances for more details.</a></li><li> The <strong>Tapered Annual Allowance (TAA)</strong> is a lower AA.<strong> </strong>This may affect you if your 'threshold income' (your income from all sources before tax) is over £200,000 and your 'adjusted income' (your annual income before tax, plus your pension savings) is over £260,000. <strong> </strong>The lowest the AA can taper down to for those affected by TAA is £10,000.</li><li>The <strong>Money Purchase Annual Allowance (MPAA)</strong> is only triggered if you start to take money from a defined contribution (DC) pension pot in a flexible way such as using drawdown. You should notify Railpen if you trigger the MPAA in another scheme. The <strong>MPAA</strong> is currently set at £10,000 and may be measured against any DC contributions you make.</li></ul><p>You can find out more about tax relief and allowances by visiting <a href="/pension-essentials/pension-tax-limits">the pension tax limits page </a> and watching our videos. </p><h1>5. Saving more into your pension - Additional Voluntary Contributions<strong> </strong></h1><p>While your rail pension provides good benefits, you may wish to save more if you want a higher level of comfort in life after work.</p><p>Saving extra for your pension with Additional Voluntary Contributions (AVCs) is an excellent, tax-efficient way of achieving this. </p><p>Your AVCs are invested with the aim of building up extra pension savings over time. You can choose your own investment funds from a range offered to you, or have them chosen and managed for you.</p><p>AVCs are popular with RPS members because:</p><ul><li>You don’t need to save a set amount every month, although most people do</li><li>It’s a great way to save extra for retirement if you get payments that don’t qualify for your pension (like overtime and bonus payments) </li><li>You get tax relief (on your tax rate) on anything you put in (up to the limits of the Annual Allowance)</li><li>You can put in as little as £2 per week</li></ul><p>DB members who save more via AVCs pay first into BRASS (this is the name of the DB AVC arrangement).</p><p>DC members who save more via AVCs pay into their Personal Retirement Account (PRA).</p><p>You’ll need to speak to your employer if you wish to start saving into AVCs.</p><h1>6. Life changes and your pension</h1><p>It’s wise to know what might happen to your pension if a welcome, or unwelcome surprise comes your way.</p><h3>Family leave </h3><p>If you get maternity, paternity, family or adoption leave pay, what you pay into your pension will be based on what you are earning at the time, while your employer will continue to pay their contributions based on your normal rate of pay. During family leave, your Scheme membership will normally be continuous. </p><p>If you are no longer receiving any pay while on family leave, you won’t normally pay any contributions, and different rules will apply. Some employers will pay your contributions during this time so that your Scheme membership remains continuous but these contributions would have to be repaid on your return to work. If you choose not to repay, then a break in service will be applied to your record. For more detail, and to see the rules for your particular Section, please consult your Member Guide. This can be found on your myRPS home page if you are logged in to your account.</p><h3>Divorce or dissolution<strong> </strong></h3><p>During divorce or the dissolution of a civil partnership, your pension is likely to be considered when financial settlements are worked out. A court order can be made to transfer part of the value of your pension benefits to your ex-spouse, or ex-civil partner. </p><h3>Ill health or incapacity </h3><p>If you need to retire early due to ill health, you should check your member guide to see if you are able to take your pension at that time. Conditions apply and medical evidence is required. </p><h3>Death<strong> </strong></h3><p>A valuable lump sum could be paid to your loved ones if you die before you claim your benefits. When deciding who should receive this, the Trustee will take your wishes into consideration. You should make a ‘nomination’ so the Trustee knows who this will be. You can easily do this if you’re logged in to your myRPS. Go to 'My pension' on your home page and then 'My nominations'.</p><h1>7. How to plan ahead for your future retirement<strong> </strong></h1><p>If you know what your income is likely to be when you retire, it’s much easier to steer a clear course to retirement. </p><p>If you’re a member of the RPS, there are 2 simple ways to find out. You can <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">register or log in to your myRPS</a> and use the online pension planner (for DB members) or retirement modeller (for DC members). Or, both DB and DC members can request online estimates any time by logging in to their accounts.</p><p>To find out how much you may expect to need to live on in retirement you can use the simple <a href="/knowledge-hub/help-and-support/retirement-budgeting-calculator">Retirement budgeting calculator</a>. This uses figures from the Pensions and Lifetime Savings Association (PLSA) Retirement Living Standards to help us picture what style of lifestyle we’d like in retirement and how much this would cost us.</p><p>If there’s a shortfall between how much you’re likely to get and how much you’ll need, you’ll then need to make adjustments. One of the easiest ways to top up your railways pension is via AVCs.</p><p>Other solutions could include taking your benefits later or adjusting your lifestyle plan. </p><h1>8. How to approach retirement<strong> </strong></h1><p>At retirement, you have several options available. It’s good to know what these options are beforehand so you can plan in advance. </p><h3>DB members have a guaranteed pension for life. You can: </h3><ul><li>Take part of your pension benefits as a cash lump sum and the rest as regular pension payments. It’s up to you how you divide this up. Generally, as long as the lump sum is worth 25% (but no more than £268,275) of your entire benefits, or less, then it will be tax free. </li><li>Take your entire pension benefits as regular pension payments. This is only possible if the rules of your particular pension section allow it.</li><li>In limited circumstances you can take your entire benefits as a cash lump sum.</li></ul><p>It’s important that you understand the benefits and limitations of each of these options in retirement before making a decision. See more in <a href="/defined-benefit-members/Im-planning-to-take-my-pension/ways-to-take-my-pension">ways to take my pension</a>. </p><h3>DC members have different options for retirement.</h3><p>In the RPS, the money you’ve built up in the Industry-Wide Defined Contribution (IWDC) section is known as your Personal Retirement Account (PRA). </p><p>You have 3 main options when you retire. You can:</p><ol><li>get a flexible income, taking it a bit at a time. This is known as drawdown. Your balance remains invested.</li><li>get a regular, secure income, known as an annuity</li><li>take all of the money in your PRA as a cash lump sum. We call this total encashment. </li></ol><p>You can normally take up to 25% (up to a maximum of £268,275) of the funds in your PRA as a tax-free cash lump sum.</p><h3>More on drawdown</h3><p>The Railways Pension Scheme (RPS) does not offer drawdown directly.</p><p>If you’re considering this option, you will need to transfer money from your Personal Retirement Account (PRA) and set up drawdown with another provider.</p><p>The Trustee has appointed Legal and General Investment Management (LGIM) to offer members access to a <a href="http://www.legalandgeneral.com/workplace/campaigns/rps-pas" target="_blank" data-sf-ec-immutable="" data-sf-marked="">drawdown facility</a>.</p><p>This partnership with LGIM means RPS members considering drawdown can access a high-quality arrangement, with preferential fees, although you are still free to go elsewhere. </p><p>These options for DC members all come with different tax implications, benefits and risks. What you receive, the fees you pay and whether you’re eligible for each option, may also be different depending on which provider you choose. You can find out more in our <a href="https://cdn.rpmi.co.uk/mp-sitefinity-prod/docs/default-source/rayn/guides-of-iwdc-members/a-guide-to-retirement-options.pdf?sfvrsn=36c5518a_20">Read as you Need guide to retirement options</a>. </p><h1>9. Other benefits in retirement<strong> </strong></h1><p>These benefits described below are from the government and are not connected to the RPS.</p><h3>State Pension</h3><p>This is a regular payment from the government once you reach State Pension Age. Whether you can get it or not depends on your National Insurance record. </p><p>You can quickly find out how State Pension works, whether you can get it and how much you might get in a simple 3-part guide here: <a href="https://www.gov.uk/government/publications/easy-read-new-state-pension" data-sf-ec-immutable="" data-sf-marked="" target="_blank">Easy read new State Pension</a>.</p><p>For more information on the new State Pension, go to <a href="http://www.gov.uk/new-state-pension" data-sf-ec-immutable="" data-sf-marked="" target="_blank">www.gov.uk/new-state-pension</a>.</p><h3>Pension credit<strong> </strong></h3><p>Pension Credit is a payment from the government which could help you with your living costs if you’re over State Pension age and on a low income. </p><p>Pension Credit is separate from your State Pension, and you may still be able to claim it even if you have another income, savings or are claiming another pension.</p><p>To claim Pension Credit you must have reached <a href="https://www.gov.uk/state-pension-age" data-sf-ec-immutable="" data-sf-marked="" target="_blank">State Pension age</a> and live in England, Scotland or Wales. </p><p>To find out if you may be able to claim Pension Credit and for more guidance on how to apply, visit <a href="https://www.gov.uk/pension-credit/eligibility" data-sf-ec-immutable="" data-sf-marked="" target="_blank">Gov.uk</a>.</p><h1>10. External support<strong> </strong></h1><p>You will find plenty of additional information and guidance throughout your member website here at <a href="https://member.railwayspensions.co.uk/" data-sf-ec-immutable="">railwayspensions.co.uk</a> but if you decide to seek external support, here’s where you can go below.</p><h3>Financial support and guidance<strong> </strong></h3><h4 style="margin-left: 30px">MoneyHelper</h4><p style="margin-left: 30px">From the Money and Pensions Service (MaPS), MoneyHelper brings together the support and services of 3 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. This includes a variety of pension topics. Go to Pensions and retirement at <a href="http://www.moneyhelper.org.uk/" data-sf-ec-immutable="">MoneyHelper</a>. </p><h4 style="margin-left: 30px">Gov.uk</h4><p style="margin-left: 30px">If you’re unclear about any pensions, tax, or National Insurance issues, you can search the government's website for clear, jargon-free explanations. Go to their <a href="https://www.gov.uk/browse/working/workplace-personal-pensions" data-sf-ec-immutable="">Workplace and personal pensions</a> page for a range of useful, free information.</p><h3><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: "Open Sans Condensed", sans-serif; font-size: var(--font-size-h3); font-weight: bold; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">Financial advice</span></h3><p>This is different to simple guidance. Financial advisers offer you professional advice on financial decisions and you will have to pay for their services. </p><p>If you’re looking for financial and pension advice, please be very wary of scams and fraudsters. Visit <a href="https://member.railwayspensions.co.uk/resources/safety-and-scams" data-sf-ec-immutable="" data-sf-marked="">Safety and Scams</a> to learn how to spot the warning signs. There are many fraudulent advisers around. </p><p>Financial advisers must be regulated by the <a href="https://www.fca.org.uk/" data-sf-ec-immutable="" data-sf-marked="" target="_blank">Financial Conduct Authority (FCA)</a>. You must always check to make sure whoever is offering you advice is actually regulated by the FCA by checking their own website as well as the FCA website. </p><h4 style="margin-left: 30px">Liverpool Victoria (LV)</h4><p style="margin-left: 30px">Liverpool Victoria (LV) has been chosen as the official partner to give RPS members access to financial 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. However, you are free to choose your own adviser.</p><h4 style="margin-left: 30px">Unbiased</h4><p style="margin-left: 30px">At <a href="https://www.unbiased.co.uk/" data-sf-ec-immutable="" data-sf-marked="" target="_blank">unbiased.co.uk</a>, you can find a register of Independent Financial Advisers (IFAs) in your area who will help you understand your pension, the options available, and how to manage your finances. </p><p><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: var(--font-size-h4); font-weight: bold; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">*This article is a broad overview of the RPS. Some Sections may have slight differences in their rules, so please check your Member guide for more details. You can find this in ‘My library’ when you log in to your myRPS account.</span></p><h4> </h4>
A whistle-stop guide* to 10 pension basics that all RPS members should know for the best retirement.
27/3/2023
Editorial
<p>Put simply, voting is one of the tools used by the people who invest your railway pension to help achieve investment returns needed so you have enough to live on when your working days are over. This is because shareholder voting helps them influence for positive change in the working practices of the companies your pension is invested in. </p><p>Your pension is invested in a mix of businesses operating in different industries and countries. When the investment manager, Railpen, decides to invest in a company, it has a number of instruments up its sleeve to help influence for change in certain areas of their business operations. One such instrument is its right to vote at companies’ Annual General Meetings (AGMs). </p><p>Caroline Escott, Senior Investment Manager at Railpen, oversees the company’s voting activities and is a co-author of the 2023 Global Voting Policy. We turned to Caroline to help us understand how voting in the world of pensions works and why its thoughtful execution is of crucial importance to our members’ outcomes</p><p> </p><p>Caroline, let’s start off by providing a bit more clarity around what shareholder voting is in the context of pensions and ultimately, why it matters to Railpen as an investment manager, to the Scheme and to its members.</p><h4><strong>How do you decide how to vote at a company’s AGM? What do you base your vote on?</strong></h4><p>Railpen invests in thousands of companies on members’ behalf. This means that we vote at thousands of company annual general meetings (“AGM”) each year – most of which take place over a concentrated three-month period (March to July). And each company AGM will offer investors the chance to vote for or against on anywhere between 10-30 ‘AGM resolutions’ (on specific issues such as how much to pay the chief executive and the election of company directors). It’s one of our busiest – but also most exciting! – times of year.</p><p>Our voting decisions are informed by various sources and tools. Throughout the year, we meet with our largest companies, as well as those where we have concerns around specific ESG (environmental, social and governance) issues, to further understand their approach and to try to influence them to improve their behaviour in a way that will lead to sustainable financial performance. We call this dialogue “engagement”. When we are voting at these companies’ AGMs, we consider their progress and the nature of our previous discussions and vote accordingly. We see exercising our vote and our engagement with companies as part of a broader influencing approach to try to improve behaviour, so they have to be aligned.</p><p>Sometimes we may request further information from the companies to help us strengthen our decision on how to vote on a particular resolution. </p><p>You can find details of all our voting decisions on our <a href="https://vds.issgovernance.com/vds/#/OTI4OQ==/" data-sf-ec-immutable=""></a><a href="https://vds.issgovernance.com/vds/#/OTI4OQ==/" data-sf-ec-immutable="" target="_blank">website</a>. </p><p> </p><h4><strong>Could you share the top three ‘big picture’ issues for you during this year’s voting season? </strong></h4><p>Our voting decisions (i.e whether we choose to vote for or against the various AGM resolutions) are primarily based on that company’s individual progress on the ESG issues mentioned above. We make sure we take into account their particular circumstances such as how they compare to similar companies or any additional intelligence we may have regarding their willingness to make progress. However, there are definitely some ‘big picture’ themes evidence suggests will financially impact the vast majority, if not all, of the companies we invest in – and which we will be paying close attention to during voting season.</p><ol><li><strong>Workforce treatment and mental health. </strong>I think we can all agree that an engaged, motivated and supported workforce is important for a company’s financial performance. Railpen regularly engages with portfolio companies on workforce issues and ensuring a healthy corporate culture. One of the issues that companies rarely report upon and which we feel still does not receive sufficient attention is workers’ mental health. So from this year, we will be focusing on applying voting sanctions where we feel more needs to be done to support workers’ mental wellbeing during what are challenging circumstances for all.<strong></strong><p><strong> </strong></p></li><li><strong>The climate transition.</strong> We want the companies we invest in to make not just pledges, but progress on net zero.<strong> </strong>Part of the way we assess this is to examine companies’ plans for decarbonisation. If we think these plans lack credibility - for instance if they don’t clearly outline interim targets and milestones, or fail to consider biodiversity loss or the impact on local communities of their activities - then we will consider voting against the company on the resolutions we think will most accurately express our dissatisfaction.<strong></strong><p><strong> </strong></p></li><li><strong>Cybersecurity</strong>. The pandemic hastened the shift towards an increasingly digital world, meaning that cybersecurity risk to our portfolio companies has substantially grown. Railpen has engaged for several years with those companies we deem to face substantial cybersecurity risks, and in this year’s voting season we will be voting against the directors of those companies where we think this risk has not been addressed sufficiently.<strong></strong></li></ol><p> </p><h4><strong>And how do you monitor whether progress is being made on concerns expressed by Railpen at an AGM or at another voting forum? </strong><strong></strong></h4><p>We let our largest portfolio companies know in advance how we intend to vote (and why) and sometimes that triggers a response that gives us additional information regarding their commitments and activities in a certain area. This may then impact how we vote. Furthermore, sometimes signalling our voting intention before the meeting leads to the company committing to the change we are looking for [we give an example of this later!]. </p><p>We also have rolling engagements throughout the year with the companies where we have the largest investments, or where we think there are particular concerns, and we will always discuss our voting decisions at the previous AGM and what we would expect to see from the company to ensure we do not vote against them in following years. We also regularly review documentation and communications from companies to assess whether there have been any changes made.</p><p> </p><h4><strong>Caroline, you’ve been leading Railpen’s voting work over the past couple of years. What’s changed for that time and how is that likely to impact member outcomes? </strong><strong></strong></h4><p>Over the last few years, as well as focusing on a company’s individual ESG risks, we have been increasingly thinking about the big picture themes– like climate change, biodiversity or workforce treatment – which will impact either all or the vast majority of our portfolio companies. As a result, we have been working to more closely reflect our views on these themes in how we vote (as well as in how we use other stewardship tools, like engagement and speaking to policymakers). You can see more in our <a href="https://cdn-suk-railpencom-live-001.azureedge.net/media/media/yl2lq4y3/2023-voting-policy.pdf" data-sf-ec-immutable="" data-sf-marked="" target="_blank">Voting Policy</a>, which we update each year.</p><p>Our investment in a company also gives us other rights beyond voting, and we have been increasingly looking to use these rights in recent years. These rights include the ability to question company directors publicly at the Annual General Meeting (you can see our full list of questions <a href="https://www.railpen.com/knowledge-hub/engagement/agm-statements/" data-sf-ec-immutable=""></a><a href="https://www.railpen.com/knowledge-hub/engagement/agm-statements/" data-sf-ec-immutable="" target="_blank">here</a>) and to organise shareholder resolutions that will ask a company’s other shareholders to express their views on a topic. This year, we have also helped arrange a resolution on climate change at a large US utility firm.<strong></strong></p><p> </p><h4><strong>Can you share with our readers a success story from your experience of using Railpen’s right to vote</strong>?</h4><p>Many more examples can be found in our annual <a href="https://www.railpen.com/knowledge-hub/reports/All?mediatype=All&order=0&term=stewardship" data-sf-ec-immutable="" data-sf-marked="" target="_blank">Stewardship Reports</a> (flick to the section on “Thoughtful Voting”) but a recent one is as follows. </p><p>We had previously engaged with a large and complex non-UK financial services company around its board composition, including the need for a cognitively diverse group of directors who together have the right skills, expertise and appropriate availability to be able to provide effective oversight. One of the directors they had put forward for appointment at the 2022 AGM sat on so many boards and other committees that we felt they would be unable to fully contribute to the oversight of such a complex company. We flagged this issue to the company in advance of the AGM, noting that we were likely to vote against the director’s appointment unless further steps were taken to ensure they could commit enough time. In response, the company issued an announcement that week that the director would be stepping down from some of their other commitments in order to take up this new appointment. We welcomed this and were able to vote in favour of the appointment, but continue to engage with the company to understand how the new director is settling in.</p><p> </p><h4><strong>We are in the lead up to a busy “voting season”, starting this month– what are your expectations and hopes for it and how are you getting ready for it</strong><strong>?</strong></h4><p>The ultimate hope for every voting season is that we won’t have to vote against any company on any of their resolutions, as they are already responding to our engagements and making progress on the ESG issues which matter most to their long-term financial performance! However, this is unlikely to happen for every single one of our thousands of holdings.</p><p>So the objective is that we effectively wield our voting – and other ownership – rights this season to help us influence companies to improve their behaviour, in a way which ultimately helps us secure our members’ futures. The key to a successful voting season is preparation. To this end, we’ve: refined our 2023 Global Voting Policy; made the most of the available systems and platforms to ensure that we have the best possible information at our fingertips to inform each vote; and have a plan – which we are already implementing – for engaging with our investee companies in advance of their AGMs to ensure we are on top of the latest developments and they understand our position (and how we might make our views known through our vote).</p><p> </p><h4><strong>Get familiar with the topic </strong></h4><p>If you are interested in understanding more about Railpen’s global voting positions for the 2023 AGM season, take a look at the <a href="https://cdn-suk-railpencom-live-001.azureedge.net/media/media/yl2lq4y3/2023-voting-policy.pdf" data-sf-ec-immutable=""></a><a href="https://cdn-suk-railpencom-live-001.azureedge.net/media/media/yl2lq4y3/2023-voting-policy.pdf" data-sf-ec-immutable="" target="_blank">2023 Global Voting Policy</a>. </p><p>For a broader take on Railpen’s approach to incorporating ESG factors in its work to protect and enhance the value of members’ pension savings, and the journey to net zero, have a read of the <a href="https://cdn-suk-railpencom-live-001.azureedge.net/media/media/52lhtclx/stewardship-report-2021.pdf" data-sf-ec-immutable="" data-sf-marked="" target="_blank">Stewardship Report</a>. </p>
Voting allows shareholders to hold companies accountable and help safeguard your retirement savings.
21/3/2023
Editorial
<p>The cost of living crisis grouped with the aftermath of the Covid-19 pandemic, the gender pay gap and late pension saving habits of some generations are among some of the main reasons why single mothers are classed as one of the most vulnerable groups in our society.</p><p>And they are not a small segment either. According to Scottish Widows’ latest Women and Retirement Report, released in November 2022<sup>1</sup>, there are nearly 1.7 million single mother households in the UK today, and they constitute 20% of households with children (there are also around 200,000 single fathers). </p><p>This Single Parents Day - 21 March - we look at how each one of the factors has impacted and collectively led to single mothers having to experience extreme financial difficulties in their daily lives and how they can be supported with saving for retirement. We do this together with Julie Ann Mavin – a professional, a pension saver and a single parent to a teenager. We’re bringing Julie Ann’s perspective in, hearing it first hand from someone who is living the working single parent life and knows what that encompasses – the good and the bad.</p><p> </p><h3>Single mothers taking the biggest hit<br></h3><p>Times are extremely hard for many people in the UK, but research shows that the cost of living is putting a major strain on single parents with single mothers being affected the most. There are a number of reasons for this with <strong>the gender pay gap</strong> and <strong>the cost of childcare</strong> taking a prevailing role. </p><p><br></p><h4>Women earning less than men<br></h4><p>The significant gender gap in income between men and women, with women earning a lot less than men, means women have less capacity to meet increasing financial demands. According to the report cited above, the average man earns over £30,900 a year with the average woman earning over £21,900.<br></p><p>PwC’s Women in Work Index 2023<sup>2</sup> found that what they call motherhood penalty – the financial strain put on women raising children – has become the most significant driver of the gender pay gap. The research also suggests that affordable childcare is paramount when it comes to helping mothers feel more financially secure and having a chance to get back on the career ladder in a timely manner.<br></p><p>But is the recent announcement made as part of the Spring Statement on 15 March that free childcare will be gradually introduced from next year a light at the end of the tunnel? The pensions industry has gladly welcomed the reform news in hope that the phased launch of long-awaited free childcare for under 3s could help close the gender pension’s gap. <br></p><p>Naturally, women take a much bigger hit than men, taking career breaks to have children, having more childcare responsibilities and having to take more time off work. This in turn has a direct impact on their income and saving habits. There is evidence that the current financial circumstances are having a direct impact on women’s attitude to saving for later life. 16% of women have said that they have to reduce the amount they put into their pension to be able to cope with pressing financial outgoings. The ‘Women and Retirement’ report also suggests that women are having to reduce the monthly contribution they make towards their life after work by an average of £152 per month . By doing so, they are taking a much bigger hit, missing out on benefits such as tax relief from the government and employer contributions towards their pension. <br></p><p>Julie Ann Mavin lives in Newton Aycliffe, in the North East of England, and is a single parent to a 15-year-old boy. She said she considers herself lucky as she hasn’t felt the need to change her pension contributions so far. Julie Ann also said that saving into a pension has always been of great importance to her and she’s been saving towards her future since she was 18. <br></p><p>“Having pension provision in place for when I retire has always been important to me but now as a single person it is even more important as I need to ensure that I can support myself when my working life comes to an end. It is also of some comfort that a death benefit would be paid if I was to pass away.<br></p><p>“Although it’s important to have money in the bank to provide a certain standard of living for your family, you also should think about the bigger picture and how you will afford to live later in life,” added Julie Ann.</p><p> </p><h4>Childcare costs and work patterns<br></h4><p>The cost of childcare in the UK can often take up a large proportion of the family budget of dual-parenting households, even more so for single parents. This can make things quite difficult for single parents who are having to juggle two very important roles – bread winners and main carers for their children. Single parents charity Gingerbread<sup>3</sup> has found that the lack of affordable childcare is what prevents single parents from going back to work or starting a job. <br></p><p>According to 2019 statistics released by Gingerbread, 40% of single parents find it difficult to meet their childcare costs. The percentage is likely to be a lot higher four years on, considering the current financial climate and the impact the Covid-19 pandemic has had on many aspects of daily life. Recent news about childcare becoming much more affordable from next year for under 3s will hopefully help ease off the financial strain and promote career development with single parents. <br></p><p>Julie Ann commented that although her son is now a teenager and she doesn’t have to factor in childcare costs in her monthly outgoings, she has definitely felt the pinch caused by rocketing inflation and the increasing cost of living. <br></p><p> “With the increase in the cost of food shopping and a 15% increase in school lunches, paying to feed a growing 15-year-old has become quite pricy!”<br></p><p>Research<sup>4 </sup>conducted last year (2022) highlights that the number of single mothers working part-time has increased to 54% compared to a national average of 21%. The problem with part-time working though is that for some women it might mean they won’t qualify for automatic enrolment into a workplace pension schemes as they may be earning less than £10,000 a year. To meet the eligibility criteria workers need to be earning that or more in a single role. <br></p><p>Gingerbread also found that the Covid-19 pandemic has only worsened the situation for single parents, as long-term unemployment has increased since the start of it in 2020.<br></p><p>“Many people were furloughed or made redundant during the pandemic which will have made things even harder for some single parents. Thankfully, neither happened to me. I was sent home to work but what I found quite challenging and stressful was trying to juggle working full-time, keeping productivity to a level whilst trying to ensure that Zach did his school work. At that point I couldn’t have any help from my parents as we weren’t allowed to mix households,” said Julie Ann.</p><p> </p><h3>Single mothers face poverty in retirement<br></h3><p>2022 data has also revealed that 58% of single mothers in the UK don’t meet the financial criteria to be automatically enrolled into a workplace pension with their pension wealth dropping at an all-time low of 40% during the Covid-19 pandemic. The private pension income of a single mother now stands at £11k a year (2022), down from £18.3k in 2020.<br></p><p>The dropping numbers are in stark contrast to what is needed by a single person to have a moderate life in retirement. According to the Pensions and Lifetime Savings Association’s (PLSA) Retirement Living Standards<sup>5</sup>, a single person needs over £23k a year to afford a moderate lifestyle.<br></p><p>The rather negative forecast seems to come as no surprise given the great financial hardship some single parents experience these days, having to juggle solo parenting and working life at the same time. The recent pandemic and the current financial climate are making things even harder for those groups to meet increasing financial demands, with saving for a pension taking a back seat for the foreseeable.</p><p> </p><h3>Saving today for a better tomorrow<br></h3><p>If you’re a single parent experiencing difficulties at the moment, it’s quite possible that saving for retirement isn’t a top priority for you at this moment in time. But here are a few tips on how to get on your saving journey without having to spend an awful lot. Knowing that you’re doing something to help fund your life in retirement will also help put your mind at peace. <br></p><ul><li><strong>Start now!</strong> </li></ul><p>Even if you haven’t been auto-enrolled into the pension scheme offered by your employer due to not meeting the £10,000 minimum earnings criteria, you can ask to join it any time. Ask today! If you do qualify, but you’ve opted out of the scheme some time ago, think about re-joining – it could make a huge difference to your future.</p><ul><li><strong>You don’t have to pay in half your salary to be saving for a</strong> <strong>pension</strong></li></ul><p>Paying into your employer’s pension scheme is brilliant and has lots of benefits, but if you’d prefer to save into a private one, that’s also an option. And remember, you don’t have to save loads from the get go – you can start with a small sum you can afford to give up in the beginning and then build it up as and when you can. Every little helps.</p><ul><li><strong>Remember, saving into a pension comes with lots of valuable benefits! </strong></li></ul><p>No matter how old you are, there are some fantastic benefits from saving into a pension. From contributions from your employer and tax relief on your savings - to life cover for your loved ones should the worst happens to you while you're still working - to an incapacity pension if you can't keep working because of ill health. They all come as part of the package!</p><ul><li><strong>Be proactive</strong> </li></ul><p>If you happen to receive a bonus or a pay increase, for example, think about paying more into your pension if you can. With the Railways Pension Scheme, you can consider paying in Additional Voluntary Contributions (AVCs). It’s a fantastic way to give your pension a bit of a boost as you get tax relief on what you put in, you can save as little as £2 per week if you wish and you don’t need to save a set amount every month.</p><p> </p><p> </p><h2>Works Cited</h2><p><sup>1</sup> Scottish Widows Women and Retirement <a href="https://adviser.scottishwidows.co.uk/assets/literature/docs/60824.pdf" data-sf-ec-immutable="">https://adviser.scottishwidows.co.uk/assets/literature/docs/60824.pdf</a> </p><p><sup>2 </sup>PwC Women in Work Index 2023 <a href="https://www.pwc.co.uk/services/economics/insights/women-in-work-index.html" data-sf-ec-immutable="">https://www.pwc.co.uk/services/economics/insights/women-in-work-index.html</a> </p><p><sup>3</sup> Gingerbread <a href="https://www.gingerbread.org.uk/policy-campaigns/childcare/" data-sf-ec-immutable=""><em>https://www.gingerbread.org.uk/policy-campaigns/childcare/</em></a><em></em></p><p><sup>4</sup> Now: Pension and Pension Policy Institute research <a href="https://www.nowpensions.com/about-us/fairpensionsforall/gender-pensions-gap/" data-sf-ec-immutable=""><em>https://www.nowpensions.com/about-us/fairpensionsforall/gender-pensions-gap/</em></a><em> </em></p><p><sup>5</sup> PLSA Retirement Living Standards <a href="https://www.retirementlivingstandards.org.uk/" data-sf-ec-immutable=""><em>https://www.retirementlivingstandards.org.uk</em></a><em> </em></p><p> </p>
Is comfortable retirement is a mirage for single parents, especially single mothers?
8/2/2023
Editorial
<div>It’s a good idea to log in to your myRPS account regularly to stay updated with your savings and make sure your pension is on track for retirement. </div><div><br></div><div>The tasks below will only take a couple of minutes and could make a big difference to your life after work.</div><div><br></div><h3>Spend time with your savings, register for an online account</h3><div>To get the most from your RPS membership, <a href="https://www.member.railwayspensions.co.uk/register" data-sf-ec-immutable="">register for an online account</a>. Your online account is a secure area of our site, all about you and your pension. When you <a href="https://www.member.railwayspensions.co.uk/login" data-sf-ec-immutable="">log into myRPS</a>, you can access our excellent range of tools to make retirement planning simpler and keep your pension on track. </div><div><br></div><div>When you log into your online account, you can:</div><ul><li>Request an estimate if you haven’t yet taken your benefits</li><li>See what level of income you want to aim for when you’re retired with our Retirement Budgeting Calculator</li><li>Use the Pension Planner (for members currently paying into the Defined Benefit sections), or the DC Retirement Modeller (for members of the IWDC Section) to see what income your RPS pension might give you when you take your benefits. </li></ul><div><br></div><h3>Stay connected, keep your contact details up to date</h3><div>If you’ve moved house, have a new phone number or changed email address, you’ll need to let us know straight away. We need to have the correct contact details to tell you any updates on your pension as soon as possible. You don’t want to miss out!</div><div><br></div><div>The quickest way to do this is through your myRPS account. To update your details, go to the ‘My details’ section and click ‘Contact details’. You’ll have 24/7 access to your online account, so you can make changes to your details at a time that suits you. </div><div><br></div><h3>Share the love and make your nominations</h3><div>Look after to those that matter to you by making or updating your nominations online. </div><div><br></div><div>If you die, a lump sum may be paid out if you have not yet taken your pension benefits (or took them within the last 5 years). By ‘nominating’ you tell us who you’d like the lump sum to go to. It’s important to keep your nominations up to date, particularly if your circumstances change. </div><div><br></div><div>Making a nomination is simple. You can make a nomination in the ‘My pension’ area of your online account. Alternatively you can download the <a href="46F44BF2-28A0-43CF-87FE-2827F61E2BC3">Nomination form</a>, complete it and return it to us using the Railpen address on the form.</div><div><br></div><div>If you don’t make a nomination, the payment could be delayed, so it’s worth taking a few minutes to nominate those who are special to you.</div><div><br></div><h3>Make a lasting commitment, keep checking in</h3><div>Many of us have imagined the lifestyle we want when we retire. Perhaps you’re planning a holiday or to treat yourself to a new car. By registering for an online account you’ve taken the first step towards planning for your life after work. </div><div><br></div><div>To help your savings stay on target, make a lasting commitment to log in and check on your savings as often as you can. Logging in regularly means you can track savings against your retirement goals and in line with your expectations for life after work. </div><div><br></div>
Learn more about how you can give your pension some love this Valentine’s Day…
2/2/2023
Editorial
<p>If you are in a defined contribution (DC) arrangement, such as BRASS, AVC Extra or the IWDC Section, you can decide how the money you pay into these arrangements is invested. If you don’t want to choose investment funds, you will be invested in a default arrangement.</p><p>There are a range of investments for you to choose from. How these different investments perform, determines how much money is in your pension pot and whether its value goes up, or down. </p><p><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">The first choice you need to make is how hands-on you want to be.</span><br></p><p>Do you want to:</p><ul><li>have your investment choices managed for you? We call this a <strong>Lifestyle</strong> strategy </li><li>make all of the investment decisions yourself, choosing from the range of investment funds on offer?</li><li>or a mix of both?</li></ul><p>If you can’t decide, you will automatically be invested in a Lifestyle strategy by default.</p><p>If you’re a defined benefit (DB) member, this information only applies to money you pay in to BRASS or AVC Extra. Your DB pension as a whole works differently and the benefits you receive do not depend on investment performance but on your length of service and salary. </p><h3><strong style="background-color: rgba(0, 0, 0, 0); color: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">You can have your investments managed for you with a Lifestyle strategy</strong><br><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"></span></h3><p><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">If you don’t feel comfortable looking after your investments directly, you can opt for a more ‘hands-off’ approach and choose a ‘Lifestyle strategy’.</span><br><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"></span></p><p><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">We call this ‘hands-off’ because there are fewer decisions for you to make at the outset. However, it’s still really important that you take an active interest in your investment choices and review them regularly. No investment is 100% safe and the appropriateness of the strategy you choose may change depending on your circumstances or world events.</span><br><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"></span></p><p><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">Lifestyle strategies build your pension savings while you’re still working. All investments have risk, and the lifestyle strategies have been designed with risk and return expectations that reference many members’ retirement plans – for example, some members want to take all of their pension pot as cash at once; while others might want to keep some or all of their pot invested and only take smaller lumps of cash when it’s right for them.</span><br><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"></span></p><p><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">There are 3 Lifestyle strategies offered by the RPS:</span><br></p><ul><li><strong>Annuity Purchase Lifestyle strategy</strong> – this is typically selected by members who want to convert their pension pot to a fixed-interest regular payment (an annuity) when they take their benefits.</li><li><strong>Flexible Drawdown Lifestyle strategy</strong> – this is typically selected by members who want to invest their pension pot post retirement and gradually draw down their pension pot as cash in the future and may leave some of the pot invested.</li><li><strong>Full Cash Withdrawal Lifestyle strategy</strong> – this is typically selected by members who want to take their pension pot as cash in one lump sum.<br></li></ul><p>You choose which of these 3 strategies you prefer. <br></p><p>Based on your chosen strategy, the money you pay into your pension will then be invested on your behalf by the Trustee. <br></p><p>In order to protect your pension pot, these investments move automatically as you get closer to your ‘target retirement age.’ Exactly how that happens depends on the Lifestyle strategy you have chosen. You can read more below, or in our <a href="/defined-benefit-members/saving-more-BRASS-AVC-Extra/brass-fund-choices">fund factsheets</a>. <br></p><p>While much of the work within a Lifestyle strategy happens automatically, there is still a lot for you to think about, not least:</p><ul><li>how you might want to use your DC pension pot when you retire. This could be as a one-off lump sum, as flexible payments though drawdown, or as fixed payments in an annuity. If you’re a DB member this will only apply to your funds in BRASS or AVC Extra, and not to your defined benefit pension overall. </li><li>how much risk you are prepared to take</li><li>Any changes you do make to your TRA will affect your investments including the size of your pot and the risk profile of your investment.<br></li></ul><p>The 3 Lifestyle strategies offered by the RPS are designed to meet these preferences as much as possible. But remember, the Trustee invests your pension contributions in accordance with the strategy you’ve chosen so it’s vital you keep track of your pension pot to make sure your investment choices remain appropriate. <br></p><h3><strong>How a Lifestyle strategy works </strong><br></h3><p>Individual investments which are grouped together are called a fund. <br></p><p>Each of the 3 Lifestyle strategies offered by the RPS is made up of 3 separate funds:</p><ul><li>Long Term Growth Fund</li><li>Corporate Bond Fund </li><li>UK Government Fixed Interest Bond Fund<br></li></ul><p>Each of these funds has a different level of risk. <br></p><p>How your pension pot is split between the funds depends on the Lifestyle strategy you have chosen (by selection or by taking the default investment strategy) and when you are planning to take your benefits. This is known as your Target Retirement Age (TRA). <br></p><p>Your investment allocation is reviewed and aligned to your chosen Lifestyle strategy (depending on your age), around 4 times a year. You don’t have to do anything, because all of this happens automatically. If you are taking your benefits, we will not exclude you from this exercise unless you have returned all required documentation to initiate your benefit request. <br></p><p>Around 10 years before your TRA, your money will start to move from high-risk funds – with potentially higher growth and higher losses – to less risky ones. Of course the risk of any strategy also needs to be considered in the context of your retirement plans. This is shown in the illustration below. </p><img src="https://cdn.rpmi.co.uk/mp-sitefinity-prod/images/default-source/old-site-images/infographics/investment-de-risking-graph.jpg?sfvrsn=d215e7cb_1" alt="Graph showing how investments in a Lifestyle strategy move from adventurous or higher risk funds to more cautious or lower risk funds as you approach your target retirement age (TRA)"><p><br></p><p>Exactly how much remains invested in the higher-risk funds, depends on which Lifestyle strategy you have chosen. </p><p>While the risk classification of each investment fund has been carefully considered, it is external economic factors that will ultimately determine the extent to which your investment goes up or down. <br></p><p>You can find more information about Lifestyle strategies in our <a href="" data-sf-ec-immutable="" data-sf-marked="">fund factsheets</a><br></p><h3><strong>You can manage your investments yourself, choosing from a range of funds </strong><br></h3><p>If you feel comfortable looking after your investments and want to be more hands-on, you can manage your investments by yourself. <br></p><p>You decide:</p><ul><li>which funds to invest in, based on a defined list. </li><li>how much of your pot you want to invest in each fund.<br></li></ul><p>There are 7 funds to choose from:</p><ul><li>Corporate Bond Fund <br></li><li>Deposit Fund </li><li>Global Equity Fund</li><li>Long-Term Growth Fund </li><li>Socially Responsible Equity Fund </li><li>UK Government Fixed-Interest Bond Fund</li><li>UK Government Index-Linked Bond Fund<br></li></ul><p>Each fund has a different objective and risk rating, so you can choose the one that’s right for you. For example, the lowest risk rated fund is the Deposit Fund but there are a range of medium and high risk funds too. Please check your lifestyle or self-selected investment options to ensure the risk rating meets your appetite. <br></p><p>Alongside these 7 funds, you can also invest in any of the 3 Lifestyle strategies mentioned above.<br></p><p>You can find out about the investment funds, including their risk ratings, in the <a href="/defined-benefit-members/saving-more-BRASS-AVC-Extra/brass-fund-choices">fund factsheets</a>.<br></p><p>If you choose this hands-on investment funds approach, your money will not automatically move from high to lower risk funds as you get closer to retirement. That means it’s up to you to decide if, and when that’s necessary, and to make the investment fund switch yourself. <br></p><p><strong>You can change your investment choices at any time </strong><br></p><p>To change the strategies or funds you’re invested in now, or where you want to invest in the future, <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">log into your myRPS account</a>. Then, go to the 'My pension' section and 'Funds' page.<br></p><p>If you're in a Lifestyle strategy you can also check, and change, your Target Retirement Age (TRA) in your myRPS account. <br></p><p>Any changes you do make to your TRA may affect your investments including the allocation of your pot between investment funds and the risk profile of your investment. <br></p><p>Make sure you have read all of the information available on the website and try out the Pension Planner (DB members) or Retirement Modeller (DC members) to help you understand the consequences before you act. <br></p><p><strong>You can get help deciding what’s right for you </strong><br></p><p>You can find more information about your investment options on the <a href="/iwdc-members/managing-investments/fund-choices">my investment choices page</a>.<br></p><p>If you need more support, you can also get financial advice. <br></p><p>Our advice partner Liverpool Victoria (LV) offers members financial advice at a discounted rate. You can contact LV on 0800 023 4187. You can also find Independent Financial Advisers in your local area at Unbiased.co.uk. <span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"></span></p>
Learn how investments work and what you can do if you're an IWDC member or pay AVCs.
23/1/2023
Editorial
<p>Switching jobs means you’re probably going to leave a pension behind. Save yourself the hassle by keeping track of all your pensions as your career progresses.</p><p>Staying connected with your old pension plans could make your life much easier when you come to retire as you’d know exactly how much you’ve got to live on and where that money is.</p><p>Your financial diligence will pay off in the long run so here are few tips on how to make sure you won’t lose track of your retirement income and have it all at hand:</p><p> </p><p><strong>Keep checking your online account</strong></p><p>Your online pension account is your go-to place for up-to-date information on your pension. Not all pension schemes offer this but if you’ve paid into the Railways Pension Scheme (RPS), you’ll have one. Even if you move jobs and stop paying into a pension plan, you’ll still have access to your online pension account. The only difference would be that you’d be classed as a ‘preserved’ or ‘deferred’ member rather than an ‘active’ one who is actively contributing to that pension plan. As a preserved member, you may have a restricted view of some of the tools and information that were available to you as an active member. However, the essential information about your pension like its value and performance should be available to you. If you are a preserved member of the RPS and have BRASS and/or IWDC benefits, it is important to actively check and manage your investment choices. You can do this from <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">your online account</a>. </p><p>It’s good to get into the habit of checking your account every few months or so – a reminder on your phone could be an ideal solution for this. </p><p> </p><p><strong>Keep old pension providers in the loop of any changes to your contact details</strong></p><p>This is something many of us are guilty of not doing on time or not doing at all. Equally this quick and simple job could make a huge difference to both you and your old pension provider. Every time you move house, change your email address or get a new phone number, you should tell your old pension providers. That way you’d ensure they can get in touch with you should there is anything you need to know about your pension plan with them. If you’ve paid into the RPS, you can easily update your details when you log into <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">your online account</a> – it takes less than a minute. </p><p>Reviewing your details on a regular basis, for example every three to six months, to ensure they are correct, might be a good idea.</p><p> </p><p><strong>Retain old paperwork</strong></p><p>Keep hold of any letters or other correspondence you’re received from your old pension. They may come in handy when you come to retire and having them somewhere in the house means you’ll never lose track of your old pensions. It may be worth starting a folder to help you keep them all in one place. </p><p> </p><p><strong>Keep an eye on your old pension plan’s website </strong></p><p>A quick scan of your old pension plans’ websites every now and then might help you stay in the loop of any news and updates from your old pension providers. Plus, it means you won’t miss out on any new pieces of functionality or tools they’ve introduced that could help with your retirement planning when the time comes.</p><p> </p><p><strong>Connect with your old pension on social media</strong></p><p>Check if your old pension providers are on social media and connect with them. That way, you’ll get to see bite-size snippets of all the important updates about your pension with the option to find out more about the ones that are of interest to you by clicking on the relevant links. </p><p> </p><p><strong>Having a personal budget plan? Count in your old pension</strong></p><p>Planning! Dubbed by many as a true game changer when it comes to personal finances and saving, it’s an equally helpful habit to get into when it comes to keeping track of your pension plans. No matter what program you use for your budget planning, you could always add an extra tab, column or sheet and save all the important information about your old pension plans there. Or if you’re a traditionalist and prefer the good old pen and paper, our suggestion of retaining your old paperwork might work best for you. </p><p> </p><p><strong>Transferring your pension</strong></p><p>It sounds tempting to have all your old workplace pensions under one roof but it is highly advisable you seek independent financial advice if you are thinking of going down that route. This is particularly valid if you’re thinking of transferring defined benefit pension savings to a defined contribution arrangement. This is because the value of a defined contribution pension is not a set amount and may go up as well as down.</p><p>It is a legal requirement to take advice if you are thinking of transferring defined benefit pension worth over £30,000. </p><p>For members of the RPS, we have prepared some <a href="/pension-essentials/transferring-my-pension">useful information on transferring</a> and a <a href="/knowledge-hub/help-and-support/video-library">handy video guide</a> that explain it all in simple terms.<br></p>
If you're moving jobs, make sure you keep track of your pension.
19/1/2023
Editorial
<div><p> </p><p>With nearly 40 years in the railway industry and over 20 years’ involvement in the railway pension schemes, Christine’s years in the industry have given her an invaluable understanding of your priorities and pension needs, to help you get the best retirement outcome. </p></div><div><br></div><div><p>We asked Christine to tell us what she enjoys most about her role and to share more with us about her experience in the industry. </p></div><div><br></div><div><strong>Christine, you bring a wealth of experience to your new role. Can you briefly explain what your background is and how you got to work in financial services and in pensions?</strong></div><div><br></div><div>During my railway career I have been lucky enough to have developed a wide range of skills, met and worked with staff in many different disciplines and at all levels of the rail industry. </div><div><br></div><div>I started as a ticket office and admin clerk, was a staff representative, a BR management trainee, worked in HR in engineering, undertook various project management roles and after privatisation joined the South West Trains franchise. Here, my roles included HR and payroll systems, pensions management, internal audit and 20 years as an employer representative on the Pensions Committee. I supported with passenger assistance in service disruption and special events. I also had roles in industry groups for pensions and rail staff travel.</div><div><br></div><div><p>This has given me a good understanding of the workings of the rail industry and the part pensions play in it.</p></div><div><p> </p></div><div><p><strong>What are your top three priorities as a Chair of the Trustee?</strong></p></div><p>1. Complete valuations for all sections to ensure we can pay pensions when due.</p><p>2. Continue to improve member support, online education and tools.</p><p>3. Ensure the Scheme carefully monitors risks, particularly within the current global financial markets, and we can act on any opportunities that present themselves.</p><p><strong style="background-color: initial; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"> </strong></p><p><strong style="background-color: initial; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">What do you enjoy most, or what are you most proud of in your job?</strong></p><div><p>I believe the schemes can and do make a difference in the lives of thousands of people in the rail industry and their families – it is great to be part of something that seeks to do that for generations to come.</p><p> </p></div><div><strong>Can you describe what a typical working day looks like for you?</strong></div><div><br></div><div>No one day is the same which makes the role both challenging and rewarding. </div><div><br></div><div>With so much happening in the world that can impact financial markets together with continual change to pension regulations, there is always something new for Trustees to understand and consider.</div><div><p><strong style="background-color: rgba(0, 0, 0, 0); color: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"> </strong></p><p><strong style="background-color: rgba(0, 0, 0, 0); color: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">What would you say to someone who is thinking about becoming a Pension Trustee in future?</strong><br></p></div><div>A lack of pension knowledge is not a barrier to becoming a Trustee. You will get support and training to understand the world of pensions and investments.</div><div><br></div><div>The key to good Trustee decision is in the diversity of skills, experience, knowledge and the perspective each Trustee brings - as well as their passion. Trusteeship is not for everyone and does take a lot of commitment in terms of personal development, preparation and meetings. However, you will be making a meaningful difference to the future benefits of your colleagues in the rail industry.</div><div><br></div><div>You can learn more about the role and responsibilities of The Trustee on our website in ‘The Trustee’ section of ‘Joining the RPS’. </div><div><p> </p><p> </p><p> </p></div>
Discover more about our new Trustee Chair, Christine Kernoghan.
16/1/2023
Editorial
<h3><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: "Open Sans Condensed", sans-serif; font-size: var(--font-size-h3); font-weight: bold; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">What happens to your pension when you die?</span><br></h3><p>The death benefits that may be payable from your pension are considered separately to your will, and they depend on:</p><ul><li>which type of Scheme and Section you belong to</li><li>the options you select, and </li><li>whether you’re retired or still working when you die </li></ul><p><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">You’ll find a brief guide below, but please refer to your Member Guide for more specific details of your own death benefits. Your Member Guide can be found under ‘My library’ when you log into your <a href="/my-rps">myRPS account</a>.</span><br></p><h4><strong></strong><strong>1. Death benefits for retired, defined benefit (DB) members</strong></h4><p><strong> </strong>If you’re retired, and you’re a DB member of the Railways Pension Scheme (RPS), your <strong>death benefits</strong> could include: </p><ul><li>Spouse’s pension – payable to a spouse, civil partner or same-sex spouse you were living with or married to at the date of your death. For many members this would be worth around half your basic pension. </li><li>Dependants’ pension – paid to a person who depended on you financially for 2 years prior to your death. The value may vary depending on circumstances and will reduce if the eligible dependent is younger than you by 10 years or more. </li><li>Children’s pension – at least the 2 youngest eligible children normally receive pensions until they are 18. The youngest child will typically receive 50% of the eligible spouse’s pension and the second child will receive 25%. If an eligible child continues in full-time education after they reach 18, the pension may still be paid, subject to Trustee or Committee agreement. If a child is disabled, the pension may be payable for life, if the Trustee agrees.<br></li></ul><p>There may also be <strong>a lump sum pay-out</strong> to your beneficiaries. The exact amount payable would depend on the amount of benefit you have taken since your retirement. If you have been receiving your pension for 5 years or more it’s unlikely any lump sum will be paid. <br></p><p>To help speed up the process, it’s important that you complete a Nomination form to let the Trustee know who you'd like the lump sum to be paid to. This can be done quickly and easily by <a href="/login">logging into your myRPS account</a> and going to ‘My Nominations’ in the ‘My Pension’ section of your member home page. Otherwise, it could go to the wrong person, or the payment may be delayed, which could result in tax being payable.<br></p><h4 data-list="2" data-level="1"><strong>2. </strong><strong>Death benefits for retired, industry wide, defined contribution (IWDC) members </strong><br></h4><p>If you’re a retired IWDC member, then your death benefits will depend almost entirely on how you have taken your pension. For example:<br></p><ul><li>If you have a single annuity, then all payments will stop when you die. That is unless you took a guarantee period, such as 5 years, in which case payments can continue until the end of that time or will be paid as a lump sum. </li><li>If you have drawdown, the remaining money could be paid out tax free if you die before the age of 75. If you’re over 75, then it is likely to be added to the beneficiaries’ other income and taxed. </li></ul><p>For more information, you would need to speak to your chosen annuity or drawdown provider, as these benefits are not payable directly by the IWDC scheme. <br></p><h4 data-list="2" data-level="1"><strong>3. </strong><strong>Death benefits for active, or preserved, DB members</strong><br></h4><p>If you’re an active, or preserved, defined benefit member and die whilst you’re still working, your pension could pay out a lump sum. If you’re younger than 75 when you die, this payment would normally be tax-free for your beneficiaries. Death benefits may also include a pension to either a spouse, civil partner or dependent child (as in point 1 above) but this would be taxed at their marginal rate of income tax. <br></p><h4 data-list="2" data-level="1"><strong>4. </strong><strong>Death benefits for active, or preserved, IWDC members</strong><br></h4><p>If you’re an active, or preserved, IWDC member, and die before your 75th birthday whilst you’re still working, and haven’t started drawing your pension, it can be passed to your beneficiaries tax-free.<br></p><h3>How can your friends/family claim? <br></h3><p>Before any claims can be made, the Scheme administrator, Railpen, will need to be notified of your death. <br></p><p>If you were still paying contributions into the RPS when you die, your employer will notify Railpen automatically. <br></p><p>If you had already stopped paying into your pension when you die, your death needs to be reported to Railpen directly. <br></p><p>This can be done by: <br></p><ul><li>Calling <strong>0800 012 1117</strong> and selecting Option 2: Bereavement. Or calling <strong>+44 1325 342 800</strong> internationally</li><li>Emailing <a href="mailto:csu@railpen.com"><strong>csu@railpen.com</strong></a><strong> </strong>or </li><li>Writing to Railpen at <strong>PO Box 300, Darlington, DL3 6YJ</strong><br></li></ul><p>For security reasons, Railpen will need to confirm at least three of the following: <br></p><ul><li>Your full name</li><li>Your date of birth</li><li>Your Pension reference number and/or National Insurance number</li><li>Your date of death</li><li>The name and address of whoever we should contact about your pension moving forward. <br></li></ul><p>Please ensure your friends/family are aware of these requirements. And know what they need to do in the event of your death. They can find more information <a href="/knowledge-hub/help-and-support/reporting-a-death">on the reporting a death page </a> <br></p><p>Once we know that you have died, we will write directly to whoever is dealing with your affairs. For example, this may be your next of kin or the executor of your estate. They will be asked to complete and return some forms. These forms will help us to identify anyone who might benefit from your pension.<br></p><p>Then, we will contact any potential beneficiaries to explain what they may be entitled to and what they need to do next. <br></p><p>Once we have received the information needed and proof of ID from all the potential beneficiaries, your death benefits will be considered by the Trustee. In line with scheme rules, the Trustee will decide where any death benefits should be paid. <br></p><p>All of this takes time, so it may take quite a while for any benefits to be paid following your death. <br></p><p>Our priority is making sure your money goes to the right people. We’ll do everything we can to make that process as quick and easy as possible for everyone involved. And our team will be on hand to help every step of the way. </p>
Uunderstand what could happen to your pension, when you die and make sure your potential beneficiaries know what they need to do.
10/1/2023
Editorial
<p>Potential long term effects such as global warming have been attributed to climate change and we recognise some members may be concerned by these stories. But what do they mean in the context of pension schemes? How does tackling the climate crisis reflect Railpen’s core purpose of securing members’ futures? And why does climate change continue to sit highly on Railpen’s agenda? </p><p>We sought answers from Chandra Gopinathan, Senior Investment Manager at Railpen, who is also leading on the climate change work the company does. Here, Chandra helps us better understand the risks and opportunities of climate change for Railpen as an investor and caretaker of members’ pensions. </p><p><strong> </strong></p><p><strong>Chandra, ‘climate change’ has been researched and discussed for more than a century but seems to engulf the news now more than ever. Could you briefly explain what climate change is and how it is linked to pensions? </strong></p><p>Research indicates that climate change is a pressing area of discussion, now more than ever. Climate change is described as long-term shifts in temperatures and weather patterns. These shifts may be natural, but human activities can also be a driver of climate change and global warming.<br></p><p>Following the announcement of the UN Sustainable Development Goals in 2015, companies and investors have been incorporating climate considerations into their working practices. This includes the way in which companies operate and the way pension schemes invest their members’ money. <br></p><p>When it comes to pensions, climate change can have a direct impact on the returns on investments we make on behalf of our members. <br></p><p><strong> </strong></p><p><strong>Tell us about the work that Railpen does in the climate change area. </strong></p><p>Railpen invests the contributions that members and their employers pay into their pension. We do this to achieve the investment returns needed to give you an income in retirement. We carefully choose the companies and assets we invest in while making sure that they seek to address environmental, social and governance (ESG) issues in the way they operate. One of the key criteria we look for when we decide where to invest is a company’s consideration of - and efforts in - managing the implications of climate change on its business. This is because we recognise the impact it could have on the company’s business, the scheme’s investment and on humanity as a whole if left unaddressed. </p><p>We strive to invest in companies that can adapt their business models to deal with major threats or issues, such as the ones posed by climate change. We believe these companies will be most likely to do well in the long-term. <br></p><p><strong> </strong></p><p><strong>Is the work on managing climate risks on an investment portfolio sufficient? Surely there are many other external participants and factors that need to align to ensure that the world moves smoothly to a low carbon economy. </strong></p><p>It’s an ecosystem effort. Managing and reducing carbon emissions in a portfolio is good but does not always contribute to a greener economy. In order to achieve real world emissions impact, it is important to identify and address key climate risks in the companies we invest or plan to invest in. <br></p><p>However, it is more important to understand and support all participants of the ecosystem, including companies, policy makers, governments and consumers, on the activities they need to undertake to help us move to a low carbon economy. We use every tool at our disposal to encourage companies to act responsibly and address the impact of the climate crisis.<br></p><p>Railpen works closely with many industry leaders, most notably the Institutional Investor Group for Climate Change (IIGCC) , the UK Transition Plan Taskforce (TPT), Transition Pathway Initiative (TPI), International Sustainability Standards Board (ISSB) and with regulators and policy makers. Through this work we aim to encourage companies to clearly disclose climate risks and opportunities to their business and how they plan to address those. </p><p>We engage with companies on implementation of this disclosure and use our right to vote against companies that are not prepared. On the contrary, we invest in companies, assets, technologies and solutions that will be essential for the low carbon economy. The approach we take is outlined in Railpen’s annual <a href="https://cdn-suk-railpencom-live-001.azureedge.net/media/media/bq1cjgd1/tcfd-report-rps-2021.pdf" data-sf-ec-immutable="">Taskforce on Climate-Related Financial Disclosures</a>. <br></p><p><strong> </strong></p><p><strong>And Chandra, how do you ensure that member preferences and considerations on climate change are reflected in the work that you do on this issue?</strong></p><p>We know many members are interested in the work that we do, not just on the climate change front, but in all areas that support a sustainable future for them, and for all. This is why we strive to maintain a constant dialogue with our members. We conduct regular member surveys and hold member workshops to ensure we are getting feedback and opinion first hand. We do this because we care about our members’ views and opinions on the work that we do and on the sector as a whole. <br></p><p>Climate change very much remains one of the key sustainability themes that is of a great interest to members and we will continue to seek members’ input in our work going forward. In September 2022, we published our <a href="https://www.railpen.com/media/3gelmunf/so-member-report-2021.pdf" data-sf-ec-immutable="">Sustainable Ownership Member Review</a> which was designed specifically for members and provides the perfect starting point for anyone wanting to find out more about our work.</p><p> </p><p><strong>How does Railpen ensure that companies do not overstate their credentials when it comes to the climate transition (also known as ‘greenwashing’)?</strong><br></p><p>Firstly, let's bring clarity around what greenwashing means in the context of climate issues. Greenwashing refers to situations in which companies either misrepresent or exaggerate the activities they undertake to tackle climate transition. The term is also used when those companies use diversion tactics to distract stakeholders from key climate issues and their approach or lack of approach to addressing them.<br></p><p>We detect greenwashing through promoting clear and simple disclosure from the companies on our portfolio. We then evaluate companies for their governance, disclosure, emissions performance, transition planning, engagement, lobbying and social impact. With the strength of our screening and analysis, we aim to identify and highlight cases of greenwashing, by drawing on industry best practices guidelines, verification from independent sources of information, cross-referencing companies with sector peers and ongoing management meetings. </p><p> </p><p><strong>Are you optimistic about how things are progressing with regards to tackling the climate crisis and the efforts made globally?</strong></p><p>Decarbonising the real world remains a challenge faced by all. Even in 2022, there are more questions and challenges than solutions currently with politics still remaining a key driver. The silver lining, however, is that discussions around opportunities and potential solutions, are now much more frequent, honest and credible than they have ever been in the past, and the climate crisis seems to be getting more attention than ever. </p><p>Things are moving beyond headline ambitions, targets and communications, and there is a growing pool of resources and information for any business, investor or consumer interested in learning and doing their bit for tackling the climate change issue.</p><p>Legislation like the US Inflation Reduction Act and EU taxonomy are key milestones in supporting and encouraging the development of new climate technologies and climate-related disclosure.</p><p>To sum up, broadly speaking the picture is cautiously optimistic. There are the inevitable and constant new challenges to overcome which is part of the progress and effort in moving the climate agenda forward.</p><p><strong> </strong></p><p><strong>What has been the highlight of the work you’ve done in this area? What are you most proud of?</strong></p><p>There were a number of initiatives on the climate and sustainability side at Railpen during 2022, which we have been recognised for internally and externally, both on a national and international level. </p><p>We are proud to have been recognised and awarded for our work, and hopefully our members will be as well. Two notable ones include:<br></p><ul><li>The development of our own in-house analytical tool for climate and Net Zero assessment of companies (CRIANZA) which we have been applying to our portfolios.</li><li>Our contribution and leadership in the climate engagement space with our work with portfolio companies, regulators and initiatives like IIGCC (The Institutional Investors Group on Climate Change). Railpen, as part of an investor group, engaged with a number of companies, one being a leading US utility and steered it to a Net Zero commitment and increasing investments in renewable energy. We are also leading an initiative for bondholders to be able to increase their influence with companies in steering them to manage and adapt to climate change.<strong></strong></li></ul><p><strong></strong><strong>Looking ahead, what does 2023 hold for you? What will you be focusing on in your work when it comes to climate change?</strong></p><p>2023 will see us moving ahead on several fronts in climate-related work. The key focus will be on investments in the energy transition, climate transition planning and related engagement, biodiversity and natural capital solutions. We will also do a piece of work on improving and expanding our framework to analyse climate transition risk for companies. We look forward to communicating further details with our members as these projects progress forward.</p><p> </p>
As a responsible investor, Railpen continues to lead and collaborate to drive meaningful change and progress.
6/1/2023
Editorial
<h3><strong>Explore your RPS pension</strong><strong></strong></h3><p>Get familiar with your pension and benefits by <a href="https://member.railwayspensions.co.uk/login?ReturnUrl=https%3a%2f%2fmember.railwayspensions.co.uk%2fmy-rps" data-sf-ec-immutable="">registering for</a> and logging into your <a href="https://member.railwayspensions.co.uk/login?ReturnUrl=https%3a%2f%2fmember.railwayspensions.co.uk%2fmy-rps" data-sf-ec-immutable="">myRPS account</a>, where you can plan and manage your future easily. Pension jargon can feel confusing, which is why we’ve created ‘Read as you Need’ <a href="/knowledge-hub/help-and-support/RAYN">guides</a> to make complex topics easy to understand. Our <a href="/knowledge-hub/news-and-views/blog">blog</a> offers insights to help you understand and manage your pension, tells you about changes in the industry and shows how the Trustee are working to look after your pension. You can also request an estimate of your benefits at any time by logging in and visiting the ‘My Pension’ section.<strong></strong><br></p><h3><strong>Set saving goals</strong></h3><p>Whether you want to enjoy a steadier pace of life or continue the lifestyle you have now, deciding what you’re saving for early on makes your goal for the future clearer and will help you plan more effectively to achieve it. <br></p><h3><strong>Understand what you might need in retirement - use our retirement budgeting calculator</strong></h3><p>Our <a href="/knowledge-hub/help-and-support/retirement-budgeting-calculator">quick-and-easy tool</a> will help give you a rough estimate of how much you’ll need for your desired future. This considers factors like where you plan on living and how many holidays you’d like per year.<br></p><h3><strong>Understand how you are doing against that target – use the planning tools</strong></h3><p>If you’re a defined benefit (DB) member, you can find out the income you’re likely to get from your RPS pension in retirement by using the Pension Planner. You’ll find this in the ‘Planning for the future’ section when you log in.</p><p>If you’re a defined contribution (DC) member, you can find out what your personal retirement account (PRA) might be worth when you plan to stop work by using our DC Modeller. You’ll find this in the ‘Planning for the future’ section when you log in. <br></p><h3><strong>Think about saving more if you need to - you can make Additional Voluntary Contributions (AVCs)</strong></h3><p>AVCs, put simply, are extra money you can put aside now to <a href="/pension-essentials/saving-more">boost your pension benefits</a>. To work out what impact AVCs may have, use the planner and modeller tools mentioned in the section above. Here, it’s helpful to consider the basics - home and bills, your wish-list – holidays and sports clubs, and the rest – family needs and potential unforeseen pay outs to see if you can afford to put a bit more aside towards your life after work.<strong></strong><br></p><h3><strong>Investment choices</strong></h3><p>For Industry Wide Defined Contribution (IWDC) members or those paying AVCs, the Trustee has selected a range of funds to invest your money into. If you want to select which funds to invest in, simply log in to your account to choose. If you don’t choose an option, you’ll automatically be entered into the ‘default’ fund, which is the <a href="https://member.railwayspensions.co.uk/iwdc-members/managing-investments/fund-choices#:~:text=Flexible%20Drawdown%20Lifestyle,-How%20it%20works&text=This%20means%20the%20money%20that,as%20cash%20in%20the%20future." data-sf-ec-immutable="" data-sf-marked="">Flexible Drawdown Lifestyle Fund</a> if you’re a member of the IWDC Section or AVC Extra, or the Full Cash Withdrawal Lifestyle for BRASS members.<br></p><h3><strong>Transfer old pensions into your new one</strong></h3><p>For previous workers in the rail industry, you may be able to transfer your previous pensions into your new one. This is called an intersection transfer. To find out if you qualify for a transfer, have a look at your 'Member Guide’ which can be found in ‘My Library’ after you’ve registered for and logged into your account.<br></p><h3><strong>What to do if you get stuck…</strong></h3><p>Our virtual assistant is always on hand to offer you the help you need. Simply ask it a question and it will help you find the answer. Select the small blue/white face icon on the bottom right of your screen to open the virtual assistant.</p>
Happy New Year and a warm welcome to you all! Here are some tips to get the most out of your new pension.
7/12/2022
Editorial
<p>From understanding pension tax to finding out what would happen to your pension if you die in service, the stories are full of pension’s knowledge and have something useful for everyone.</p><p>Read more than 7,000 times combined, our top articles for this year provide a handy recap of some of the most important pension topics and could help you kick off the New Year with a better grasp of your pension and more confidence in your financial know how.</p><p> </p><p>1. Future increase to the Normal Minimum Pension Age</p><p>Our most popular article for this year – read nearly 2,000 times – provides an overview of the proposed increase to the Normal Minimum Pension Age (NMPA). NMPA is the earliest age at which most pension savers can access their pensions without having to pay a tax charge - unless they are retiring due to ill health.</p><p>The Finance Act 2022, which received Royal Assent earlier this year, will increase the NMPA from age 55 to 57 from 6 April 2028.</p><p>Read the <a href="/knowledge-hub/news-and-views/news-updates/2022/02/07/future-increase-to-the-normal-minimum-pension-age">article</a> to find out more about the increase.</p><p> </p><p>2. What happens to your pension when you die?</p><p>Closely behind is our <a href="/knowledge-hub/news-and-views/news-updates/2022/01/11/death-and-your-pension">Death and you pension</a> article. It provides useful information about the death benefits that may be paid out to people or causes that are close to your heart when you’ve gone. There are a few factors that may have a direct impact on the type of benefits that can be claimed following your death and the people who can claim them:<br></p><ul><li>which type of Scheme and Section you belong to</li><li>the options you select</li><li>whether you’re retired or still working when you die<br></li></ul><p>Your Member Guide will have more specific details of your own death benefits. If you’re logged in to your <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">myRPS account</a>, you will find your Member Guide in your home page under ‘My library’.<br></p><p> </p><p>3. Thinking of retiring? Did you know the early retirement factors were reviewed earlier this year?</p><p>The Scheme’s required to review some of the terms of its benefit calculations every so often. You should keep this mind if you’re planning to retire before or after your normal retirement age (NRA).</p><p>Depending on when the changes are implemented, they may have a different impact on members. Read more about the latest update from July this year in the <a href="/knowledge-hub/news-and-views/news-updates/2022/05/23/early-retirement-factors-reviewed">Thinking of retiring?</a> article.</p><p>Keep an eye on the website for any future updates.</p><p> </p><p>4. A simple guide on the basics of pension tax for this tax year</p><p>The topic of pension tax has always been of great importance to our members and there’s little surprise our article on it proved interesting. Pension savers often think of pension tax as a complex and confusing topic so anything to help shine a light on it is always well received by members.</p><p>The article offers an easy-to-understand explanation of how tax relief works and an overview of the tax allowances - limits on the amount of pension savings that will benefit from tax relief each tax year and over your lifetime, so <a href="/knowledge-hub/news-and-views/news-updates/2022/04/20/tax-and-your-pension">check it out</a>.</p><p><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">5. All you need to know about your Annual Benefit Statement</span><br></p><p>Your Annual Benefit Statement (ABS) is probably one of your most important and helpful documents as a member of the Scheme. We’ve published <a href="/knowledge-hub/news-and-views/news-updates/2022/02/16/all-you-need-to-know-about-your-annual-benefit-statement">an article</a> earlier in the year that explains the ins and outs of it but essentially it is your one stop shop for information on your pension for the year. Along with more detailed calculations, it tells you about the savings you have now and what they could be worth in the future.</p><p>You'll receive your ABS in the post every year.</p>
Wrapping up the year in style with five of our most popular articles.
30/11/2022
Editorial
<p>Every year that passes brings you closer to leaving work! So make sure you start 2023 with your pension plan in good shape for your future. Use those days before the New Year to check it all out. </p><p>Each of the following small tasks should just take a few minutes. You could make this an annual custom. We guarantee you’ll be so pleased you did this regularly when you finally reach retirement! </p><p><strong>1 Register for your myRPS online account</strong></p><p>Set up your own online pension account before the New Year and you can truly make 2023 the year you take charge of your pension planning and manage your future.</p><p>It couldn’t be easier. If you’re not registered already, just go to the top right hand corner of the home page on this website and click on register. Follow the simple, on-screen instructions and once you’re signed in, you’ll be able to manage your pension savings and plan your future at a convenient time for you, using the range of online tools available. You can see how to use many of these below.</p><p><strong>2 Check how much you're likely to get on retirement</strong></p><p>No matter how near, or far away your retirement is, make sure you know what your income is likely to be when you finish work. It will be so much easier to plan your future from now on if you do. Use our easy online Pension Planner (for DB members) or Retirement Modeller (for DC members) to find out.</p><p>If you’re signed in to your myRPS account, you’ll find these online tools under the 'Planning for the future’ section of your member home page on the right hand side.</p><p><strong>3 Request pension estimates </strong></p><p>A very easy way to check your pension savings is to request free, online estimates to see how much you’re likely to get on retirement. You can request as many as you like, at any time. </p><p>If you’re signed in to your myRPS account, you’ll see an option to ‘Request an estimate of Retirement Benefits’ under the ‘My Pension’ section of your home page. Click here and follow the on-screen instructions.</p><p><strong>4 Work out your retirement lifestyle costs</strong></p><p>This year, think ahead to what kind of life you would like in retirement. Knowing what this might cost, will help you to know if your pension saving is on track for the future.</p><p>If you’ve requested an online estimate, you should already have an idea of what your annual pension is likely to be. By using our Retirement Budgeting Calculator, you’ll see if your expected pension income matches your lifestyle costs. If not, you may want to make some adjustments. Find the <a href="https://member.railwayspensions.co.uk/knowledge-hub/help-and-support/retirement-budgeting-calculator" data-sf-ec-immutable="" data-sf-marked="">Retirement Budgeting Calculator</a> in the ‘Resources’ section of <strong>railwayspensions.co.uk</strong>.</p><p><strong>5 Check your State Pension</strong></p><p>New Year is a good time to find out whether you’ll be eligible for the State Pension and what you’re entitled to. You can check this at <a href="https://www.gov.uk/check-state-pension" target="_blank" data-sf-ec-immutable=""></a><a href="https://www.gov.uk/check-state-pension" target="_blank" data-sf-ec-immutable="">gov.uk/check-state-pension</a>.</p><p><strong>6 Boost your pension benefits</strong></p><p>If you’ve discovered your likely pension income isn’t going to be quite enough to fund the lifestyle you’d like in retirement, then you might want to consider making Additional Voluntary Contributions (AVCs), known as BRASS in the RPS. These are extra savings that you make which can boost your pension.</p><ul type="disc"><li>You don’t need to save a set amount every month.</li><li>It’s a great way to save if you get overtime or bonus that doesn’t usually qualify for your pension</li><li>You get tax relief.</li><li>AVCs are invested in a range of funds aimed at building up extra pension savings over time.</li></ul><p>See our Guides to AVCs, BRASS and AVC extra in the Read as You Need Guides </p><p><strong>7 Trace your old pensions</strong></p><p>Over the years, if you’ve worked for several employers during your working life, you may have lost track of the different pensions you’ve paid into. The Pension Tracing Service is free and can help you find a pension you’ve lost. Go online to <a href="https://www.gov.uk/find-pension-contact-details" target="_blank" data-sf-ec-immutable=""></a><a href="https://www.gov.uk/find-pension-contact-details" target="_blank" data-sf-ec-immutable="">gov.uk/find-pension-contact-details</a> and follow the steps.</p><p><strong> 8 Make or update your death benefit nominations</strong></p><p>Making a nomination online should just take a couple of minutes but it could make a big difference to your loved ones if you die before taking your pension.</p><p>To ensure your pension savings end up in the right hands, and avoid being subject to tax, you need to let us know, where or who you wish the money to go to, by completing a ‘nomination’. It’s also important to keep your nominations up to date if your circumstances change. </p><p>If you’re signed into your online pension account you’ll find the nominations page in the ‘My Pension’ section.</p><p><strong> 9 Check your investments</strong></p><p>If you pay into a defined contribution (DC) pension, or if you have AVC or BRASS, these contributions are invested in a range of specially selected funds.</p><p>You can manage your own funds or have them managed for you. If you’re signed into myRPS, you can change your approach, manage your own investments or switch funds online at any time.</p><p>With BRASS, you can see more about your investment choices on this website if you go to <a href="https://member.railwayspensions.co.uk/defined-benefit-members/saving-more-BRASS-AVC-Extra/brass-fund-choices" data-sf-ec-immutable="" data-sf-marked="">My fund choices</a>’.</p><p><strong>10 Support and guidance</strong></p> <p>If you need to find out more about your pension, you’ll find tons of guidance throughout this website, especially in the <a href="https://member.railwayspensions.co.uk/knowledge-hub/help-and-support/faqs" data-sf-ec-immutable="" data-sf-marked="">Frequently Asked Questions</a> section or <a href="https://member.railwayspensions.co.uk/knowledge-hub/help-and-support/RAYN" data-sf-ec-immutable="" data-sf-marked="">Read as you Need guides</a>. You can also visit <a href="https://www.moneyhelper.org.uk/en" target="_blank" data-sf-ec-immutable=""></a><a href="https://www.moneyhelper.org.uk/en" target="_blank" data-sf-ec-immutable="" data-sf-marked="">MoneyHelper.org</a> which provides free and impartial money and pension guidance for people all across the UK.</p>
No matter how near or far retirement is for you, when it comes to your pension, it really pays to plan ahead.
14/11/2022
Editorial
<div><p>The Trustee of the Railways Pension Scheme has raised concerns with the Department for Work and Pensions (DWP)’s draft occupational pension schemes regulations 2023, and has issued a comprehensive response. This is to the DWP’s recent consultation on a new set of funding and investment regulations for defined benefit (DB) pension schemes. <br></p></div><br><div>The Trustee welcomes and shares the DWP’s supportive comments about the need to make these regulations work for open DB schemes. However, there are a number of areas where it believes the current draft of these regulations will not achieve this objective. The Trustee’s response highlights several key concerns, including higher costs, systemic risks to the economy, and difficulties supporting the Government’s growth agenda – views shared by many other industry participants.<br></div><div><br>Almost 10 million people across the country remain reliant on DB schemes, with around 65% of these savers in schemes that have some form of benefit accrual, and around 23% in schemes that remain open to new members (according to the latest data from the Pension Protection Fund).<br></div><div><br>In contrast, the majority of the UK is now reliant on DC pensions, with research from the Pensions Policy Institute suggesting that over 90% of these DC savers are facing an inadequate retirement. This is a major societal problem for the next generation of retirees and beyond, and makes it ever more important that people with access to well-run DB pensions are not forced to follow this path. <br></div><div><br>The Trustee recognises that the Railways Pension Scheme and the other schemes it supports have characteristics that are not typical in the universe of UK DB schemes. However, these schemes are important, not simply to members, but also to employers and the wider UK railway industry. The Trustee believes that it is essential that pension regulations allow members to continue to build up affordable and sustainable DB pensions, and that it remains able to pay these benefits over the long-term.<br></div><div><br><a target="_blank" href="https://cdn.rpmi.co.uk/mp-sitefinity-prod/docs/default-source/default-document-library/rptcl---response-to-consultation-on-draft-funding-and-investment-regulations-2023.pdf?sfvrsn=f0794a04_7">Read the Trustee’s full response to the consultation.</a> <br><br></div><div><br></div>
Read the Trustee's response to the DWP when it comes to DB schemes.
28/9/2022
Editorial
<p>We know that Sustainable Ownership* is a topic that is of interest to many of our members. This is not only because it often happens to be at the forefront of pension talk with issues like climate, fair pay and how workers have been treated by their employers during the pandemic and others, but also because of the direct impact it may have on your pension money. And with it hitting the headlines lately, our <a href="https://www.railpen.com/media/3gelmunf/so-member-report-2021.pdf" data-sf-ec-immutable="" data-sf-marked="" target="_blank">2021 Sustainable Ownership Member Review – “<em>Staying on Track for a Sustainable Future”</em></a> – seems to be coming at the perfect time to provide members with an insight into what we have been doing on Sustainable Ownership over the past year. We hope it also brings you reassurance that your pension money is in good hands and is being managed thoughtfully despite the challenging times we are all facing.</p><p>The document has been written for you based on feedback you gave us in last year’s member survey and roundtables. We heard you, and we hope the 2021 Sustainable Ownership Member Review gives you a better understanding of how and where we are investing your pension money to give you an income in retirement. We also hope it shines a light on how we address the impact of governance and sustainability issues on the world into which you will someday retire. </p><p>We asked Caroline Escott, Senior Investment Manager at Railpen - the investment manager of the railways pension schemes - to share some of the cornerstones of the report and to talk us through some of the main points raised in it.</p><p> </p><p><strong>Caroline, you’ve been heavily involved with the production of the 2021 Sustainable Ownership Member Review. Why should our members give it a read?</strong></p><p>We know many members are interested in how we invest and manage contributions in a way that supports a sustainable future for them, and for all. Although we publish many formal, lengthy documents on our Sustainable Ownership work every year, the Member Review is short, snappy and designed specifically for members – it provides the perfect starting point for anyone wanting to find out more! </p><p><strong> </strong></p><p><strong>You’ve spoken to several of our members before writing the report. What are they mostly interested in when it comes to Sustainable Ownership and their pension?</strong></p><p>As we produce the report purely for members, we were keen to really understand what would be of most use, so we worked with our Member Communications team to survey members and hold some focus groups.</p><p>Members told us in the survey that their top three priorities were fair treatment of workers, climate change and fair pay. When we asked the same question in member roundtables, participants said that good corporate governance – that the companies we invest in are well-managed, with expert leaders who are supported by strong teams and listen to investors – was important.</p><p>As a result, we’ve provided case studies in this year’s Sustainable Ownership Member Review which explain what we’ve done on these topics over the last 12 months and how we’ve had an impact on members’ behalf.</p><p><strong> </strong></p><p><strong>You were also keen to find out what members thought of the way we are currently communicating with them. Was there anything that particularly struck you about the results? How would members like to be told of important updates on Sustainable Ownership? </strong></p><p>Something we had suspected, and which the survey results confirmed, was the high proportion of members (76%) who had never seen any of our Sustainable Ownership reports. We’d like to change that and make sure that those people who want to find out more about our work, are able to do so. </p><p>There was huge support for our suggestion that we send information through via regular email updates. Members also said that they would prefer shorter content that is easily digestible, in plain English and spread throughout the year.</p><p><strong> </strong></p><p><strong>Could you please briefly explain what Railpen has done in 2021/2022 to address members’ top issues?</strong></p><p>As investors, we have a few tools at our disposal to help us influence companies to improve what they do on governance and sustainability. This includes speaking to senior company management privately, making our concerns public – if progress is taking too long – or speaking to governmental policymakers, where we think a change in regulation may help more companies make sustainable decisions. We may also choose to remove companies from our portfolio if we think the risk they pose is too big to manage and no progress is being made.</p><p>This year, we <span style="text-decoration: underline">publicly expressed our view on companies’ approaches to sustainable ownership</span> at nearly 1,700 companies (by voting at their Annual General Meetings), flagging our concerns on one or more issues with nearly 60% of these companies. We are also intensively discussing approaches to <span style="text-decoration: underline">climate change</span> at 41 companies as part of our Net Zero Engagement Plan and have been working with the industry and policymakers to ensure more companies give us necessary information on <span style="text-decoration: underline">how they treat their workers</span> – so that Railpen and others can better hold these firms to account.</p><p>More information on our work and the impact we’ve had on members’ priority issues can be found in the Sustainable Ownership Member Review!</p><p><strong> </strong></p><p><strong>And Caroline, as a member of the Railways Pension Scheme - what is your favourite part of the Sustainable Ownership Member Review and why?</strong></p><p>I’ve got a soft spot for the case studies, where we explain how the context of the issue shapes the nature of the tools we use and – where we haven’t yet had the necessary impact – what we’re going to do instead. </p><p>I also think the glossary is really helpful. We know that some of the language we use will be unfamiliar to some members, so we’ve dedicated two pages to explaining all the key terms: if you’re reading the Member Review and need to double-check what something means, do flip to the end of the report for an explanation!</p><p><strong> </strong></p><p><strong>Looking ahead, what are your key priorities for communications with members on Sustainable Ownership?</strong></p><p>We want to encourage a two-way dialogue with members: we don’t just want to be talking ‘at’ you, we want to hear from you and if you’ve got a pressing question, we want you to feel able to ask it. </p><p>There are a few different things we can do to help build this kind of relationship. The Sustainable Ownership Member Review, which tells the story of what we do and how we’ve achieved impact on members’ behalf, is one part. The member survey – which we will be running again in November this year – is also important as it helps us gain a sense of what, if anything, has changed amongst the membership in terms of priority issues and communication preferences. And we’re hoping that by giving members the kind of regular communications they want, with the option to contact us if they have any thoughts about what they’ve read, we’re stimulating a more regular conversation throughout the year.</p><p><strong>Read the report <a href="https://www.railpen.com/media/3gelmunf/so-member-report-2021.pdf" target="_blank" data-sf-ec-immutable="">here</a>. </strong><br></p><p>*Broadly speaking, Sustainable Ownership is the way Railpen – the investment manager of the railways pension schemes - calls their approach to incorporating sustainability issues, like climate change or executive pay, into the investments Railpen manages on your behalf.</p><p> </p>
Railpen's Sustainable Ownership Member Review 2021, crafted specifically for members, is now available.
22/8/2022
Editorial
<div>Pension Credit is separate from your State Pension, and you may still be able to claim it even if you have another income, savings or are claiming another pension. It's a payment from the government to help with living costs if you’re over State Pension age and on a low income. </div><div><br></div><h3>Who is eligible for Pension Credit?</h3><div>To claim Pension Credit you must have reached <a href="https://www.gov.uk/state-pension-age" target="_blank" data-sf-ec-immutable="">State Pension age</a> and live in England, Scotland or Wales. Even if you’re still working, you may be able to claim Pension Credit to top up your income if you’re over State Pension age. </div><div><br></div><div>You can apply for Pension Credit up to four months before you reach State Pension age, and any time after. It’s worth bearing in mind that if you are eligible for Pension Credit it can only be backdated by up to three months. </div><div><br></div><div>Your State Pension age will depend on when you were born. Use the Gov.uk website to check your State Pension age.</div><div><br></div><h3>Applying for Pension Credit</h3><div>As part of your application for Pension Credit the government will consider your income. If you have a partner, their income will also be included. </div><div><br></div><div>Income includes: </div><ul><li>Any other pensions you have, including pensions you have not claimed yet</li><li>Your State Pension</li><li>Your earnings from employment or self-employment</li><li>Most social security benefits</li></ul><div>The government will also consider your savings and investments.</div><div><br></div><div>Using this information, the government will then calculate the amount of Pension Credit you will be able to get.</div><div><br></div><div>To find out if you may be able to claim Pension Credit and for more guidance on how to apply, visit <a href="https://www.gov.uk/pension-credit/eligibility" target="_blank" data-sf-ec-immutable="">Gov.uk</a>. </div><div><br></div><h3>How Pension Credit works</h3><div>Pension Credit tops up your income to £182.60 a week if you are single. Or if you have a partner, Pension Credit will increase your combined weekly income to £278.70.*</div><div><br></div><div>If you’re eligible for Pension Credit, it could help you with day-to-day living costs such as Council Tax, housing costs, NHS Services and heating bills. If you’re over 75, you could be entitled to a free TV license with Pension Credit, so it’s worthwhile looking into. </div><div><br></div><div>Even if you have savings or receive another pension, you may be entitled to Savings Credit. To claim Savings Credit, you must have reached State Pension Age before 6 April 2016, and have saved some money for when you stop working, such as a pension. If you’re eligible, you will get up to £14.48 Savings Credit a week if you’re single, and if you have a partner, you’ll get up to £16.20 a week.* </div><div><br></div><div>If you want to find out how much Pension Credit you could get you can use the <a href="https://www.gov.uk/pension-credit-calculator" target="_blank" data-sf-ec-immutable="">Pension Credit Calculator</a>.</div><div><br></div><div><em>*Figures are correct as of August 2022 but may change. To check the latest figures, visit <a href="https://www.gov.uk/pension-credit/eligibility" target="_blank" data-sf-ec-immutable="">Pension Credit: Eligibility - GOV.UK (www.gov.uk)</a> or <a href="https://www.gov.uk/pension-credit/what-youll-get" target="_blank" data-sf-ec-immutable="">Pension Credit: What you'll get - GOV.UK (www.gov.uk)<div></div></a><br></em></div><p><em><em> </em></em></p>
Find out how Pension Credit works and who can claim it.
12/7/2022
Editorial
<p>Women in 2022 would need to work 18 more years full-time to save the same amount into their pension as men, according to research*. </p><p><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">The average pension savings of a 65-year-old woman today is just 20 per cent of the average pension savings of a 65-year-old man.</span><br></p><p>While the average UK pension savings have nearly doubled to £111,600, women’s pension savings have hardly increased at all.</p><p> Global life expectancy rates show the average woman living 5 years longer than men, so in fact women should be saving more, not less!</p><h3><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: "Open Sans Condensed", sans-serif; font-size: var(--font-size-h3); font-weight: bold; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">Why is there such a wide gender gap in pension savings?</span></h3><p><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: "Open Sans Condensed", sans-serif; font-size: var(--font-size-h3); font-weight: bold; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"></span>There are numerous reasons but here are the main ones:</p><ul><li>Despite women’s employment rate currently being the highest since records began (72.7%), women are more likely to work part-time. This is usually because they’re more often the main carer for ill and elderly relatives and take time out for small children. <p> </p></li><li>Because women spend on average 10 years away from work due to caring responsibilities, this adds to the gender pay and pensions gap by offering fewer opportunities for career progression and higher salaries, according to the report. <p> </p></li><li>One in six women don’t currently qualify for automatic enrolment as they earn below the current £10,000 per annum threshold which triggers auto-enrolment by the employer. <p> </p></li><li>The high cost of childcare is found to be a barrier for many women considering returning to work. </li></ul><h3>So what can you do to help yourself?</h3><ol><li> <span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto; font-size: inherit">The law states that if you earn below the threshold but between £6,240 and £10,000, you can ask your employer to join the Scheme and your employer must include you and pay contributions towards your pension savings.</span><p><br></p></li><li>If you’re enrolled in the Railways Pension Scheme, make sure you register for a myRPS account and really get involved with your pension, so you can take advantage of all the guidance and pension planning tools available to help you prepare wisely for retirement. <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">Register and/or log in</a> and check your account today! <p> </p></li><li>Don’t forget your national insurance credits. Many benefits, including child benefits, automatically give you NI credit. Some women don’t sign up for child benefit because if their partner earns over £50,000 they would have to start paying it back. But you don’t need to actually receive the cash – you can just sign up to ensure your NI record and then your State Pension will be protected. <p> </p></li><li>You could consider extending your working life. Your Railways Pension Scheme pension will offer you a Normal Retirement Age (NRA). <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">Log in to your myRPS</a> to check what yours is and think about extending it.<p> </p></li><li>Putting in a small, extra regular amount now into AVCs (Additional Voluntary Contributions), could go a long way towards a better future. You can put as little as £2 extra per week. This means you make the most of the valuable tax relief you get and the longer you have your money invested, the more chance it has to grow. If you’re a DB member of the RPS, the main AVC scheme is called <a href="/defined-benefit-members/saving-more-BRASS-AVC-Extra/saving-more-with-BRASS">BRASS</a>. For IWDC members, you can <a href="/iwdc-members/Im-still-working/saving-more">save more with AVCs</a>. <p> </p></li><li>If you’ve had a number of different jobs, don’t forget to check that you’ve kept track of all your past pension schemes. The Pension Tracing Service is free and can help you find a pension you’ve lost. Go to <a href="https://www.gov.uk/find-pension-contact-details" data-sf-ec-immutable="" data-sf-marked="" target="_blank">https://www.gov.uk/find-pension-contact-details</a> and follow the online steps.<p> </p></li><li>If you’re a woman working in the railways, why not join <a href="https://womeninrail.org/" data-sf-ec-immutable="" data-sf-marked="" target="_blank">Women in Rail</a>? Women in Rail was created to improve diversity in the UK rail industry through providing networking opportunities and support for all women within the sector. There are regional branches across England and Scotland and the groups offer events, career opportunities, news, mentoring and awards. Women in Rail may not directly help you to boost your pension, but you’ll join like-minded women in rail and receive support and guidance.</li></ol><p><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">*The Gender Pensions Gap Report 2022 by Now Pensions and the Pensions Policy Institute (PPI)</span><br></p><p> </p>
Ladies, here are 7 ways to boost your pension.
31/5/2022
Editorial
<p>After over two years of living and working during a global pandemic, the world is slowly starting to find its way back to what feels like normal. This unprecedented time has undoubtedly left its mark on the way we live, think, work and perceive the world that surrounds us. But how has the pandemic impacted on the way we think about and plan ahead for our ‘golden days’?</p><p>Searching for the answer, the Pensions and Lifetime Savings Association (PLSA) commissioned the Centre for Research in Social Policy at Loughborough University to conduct a research and to report on ‘<a href="https://www.retirementlivingstandards.org.uk/Impact-of-COVID-19-on-RLS-Oct21.pdf" data-sf-ec-immutable="">The impact of COVID-19 on thinking about and planning for retirement’</a>.</p><p>Published in October 2021, the report aimed to develop an understanding of some of the ways in which Covid-19 may have influenced people’s experiences of, thinking about, planning for and expectations regarding retirement. </p><p>Two main conclusions were made based on the findings of this study:</p><ol><li>The Covid-19 pandemic has triggered people to re-focus on their retirement planning and to think about whether they are on track to have the retirement they want. The study suggests that this may be a good opportunity for employers and pension providers to build on the momentum and to really stress on the importance of accessing advice and support in thinking about retirement while this topic is fresh in people’s minds.</li><li>The severe social restrictions that we all had to live by as a result of the Covid-19 lockdown had highlighted the importance of having the freedom, choice and opportunity to socialise, travel and holiday abroad. And also to have the financial security to be able to afford this - central concepts and ideas contained within the definitions of the Retirement Living Standards*. The fact that we were forced to isolate from the outer world has made us realise and appreciate even more how important it is to be able to participate in the world around in the simplest of ways - seeing family and friends, eating out, travelling, planning social engagements and activities. </li></ol><p>Nineteen participants from all over England, from across a range of socio-economic backgrounds, took part in three 3-hour online discussions. Active pension savers approaching retirement (55+) and retirees were two main target groups that took part in the research by sharing their experiences, views and ideas as part of a facilitated dialogue and discussions. </p><p>Based on these conclusions and findings from another study conducted by the Centre for Research in Social Policy at Loughborough University called <a href="https://www.retirementlivingstandards.org.uk/Retirement-living-standards-in-the-UK-in-2021.pdf" data-sf-ec-immutable="">Retirement living standards in the UK in 2021</a>, the PLSA updated the Retirement Living Standards for the first time in October 2021. Some of the changes included more money for eating out, a higher personal grooming budget and the inclusion of a Netflix subscription.</p><p> </p><p>*The Retirement Living Standards are designed to help pension savers picture the lifestyle they want when they retire, and understand the cost. They are realistic expectations based on feedback from real people around the UK.</p>
The PLSA updated their Retirement Living Standards to reflect retirement expectations impacted by the Covid-19 pandemic.
13/5/2022
Editorial
<p>Deciding when to retire isn't always easy. And there are a lot of factors that can come into play:</p><ul><li>When can I start getting my pension?</li><li>Can I really afford to stop work yet?</li><li>Am I ready for the lifestyle change?</li></ul><p>You'll find more information to help you make the right decisions for you in the I'm planning to take my pension sections of the website and in the summaries below.<br><br></p><h3>Understanding when you can start taking your pension </h3><p>Most RPS members will have a Normal Retirement Age, also known as NRA, of between 60 and 65 years old. This can differ depending on the section you're a member of. <br><br>If you're unsure what your NRA is, you can check it in your Member Guide. This is available in the Library section once you've logged into your <a href="https://railwayspensions.co.uk/login" data-sf-ec-immutable="">online account</a>. <br><br>Keep in mind that your NRA is likely to be different to the age for claiming your State Pension. This is because your NRA is set by the Scheme, while the State Pension age is set by the government and is based entirely on when you were born. You can check your State Pension age on the <a href="https://www.gov.uk/state-pension-age" target="_blank" data-sf-ec-immutable="">government website.</a><br><br>Your NRA may also differ from scheme to scheme and from section to section. If you're a member of another scheme, such as previous workplace pensions or private pensions, you'll need to contact each provider directly, or refer to the relevant paperwork to find out your NRA for those schemes. <br><br>If you have preserved pensions in other sections of the RPS, please check your <a href="http://www.railwayspensions.co.uk/login" data-sf-ec-immutable="" data-sf-marked="">myRPS account </a>for more details on those.<br><br>In some circumstances, you may be able to start taking your RPS pension earlier or later than your NRA. If you're a DB member, go to the <a href="/defined-benefit-members">dedicated DB section</a> of this website, or if you're a IWDC member, go to the <a href="/iwdc-members">dedicated IWDC section</a>.<br><br><br></p><h3>Working out if you can afford to stop work</h3><p>Working out whether or not you can afford to stop work will depend primarily on 3 things:<br><br><strong>1. How much your retirement is likely to cost</strong><br><br>To work out how much your retirement is likely to cost, you can use the Retirement Living Standards, or RLS, as a benchmark. The RLS was created by the Pensions and Lifetime Association, also known as the PLSA, to show how much you may need each year in order to fund a 'minimum', 'moderate' or 'comfortable' lifestyle. <br><br>You can find out more on the <a href="https://www.retirementlivingstandards.org.uk/" target="_blank" data-sf-ec-immutable="">RLS website</a>, but as a rough guide, they suggest the following:</p><p><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-family: inherit; font-size: inherit; text-align: inherit; text-transform: inherit; word-spacing: normal; caret-color: auto; white-space: inherit"></span> <img alt="Summary showing how much you might need when you retire" src="https://cdn.rpmi.co.uk/mp-sitefinity-prod/images/default-source/infographics-(current)/rps-retirement-living-standards_v04_summary-matrix.svg?sfvrsn=4b9611a_3"></p><p>A <a href="/knowledge-hub/help-and-support/retirement-budgeting-calculator">retirement budgeting calculator</a> is also available on this website, which takes into account the RLS and lets you add other individual costs that are tailored to you. This includes your household bills, travel expenses, leisure costs and the money you spend on others. Combined, this will give you a personalised estimate of how much your retirement lifestyle may cost each year. <br><br><strong>2. How much income you're likely to have coming in</strong><br><br>Once you know how much you're likely to spend in retirement, you can then work out whether you're likely to have enough money coming in to cover those costs. You'll need to take into account all your possible sources of income. These can include:</p><ul><li>Your workplace pension — you can check your Annual Benefit Statement or log into your online account for an estimate of how much your pension will pay out</li><li>Your State Pension — the amount you get is set by the government. You can <a href="https://www.gov.uk/state-pension-age" target="_blank" data-sf-ec-immutable="">request an estimate online</a> on the website</li><li>Other pensions — such as a private pension or pensions linked to previous employment. You'll need to speak to each of the providers individually for estimates on those accounts. If you've lost their contact details, the Pensions Tracing Service may be able to help. It's a free, Government-backed <a href="http://www.gov.uk/find-pension-contact-details" target="_blank" data-sf-ec-immutable="">service available online</a> and over the phone on 0800 731 0193. Other companies offer a similar service but many charge a fee</li><li>Savings and investments — if you have savings outside of your pension, get those statements from your bank or other provider</li></ul><p><strong>3. Whether your spending and income will match up</strong><br><br>If after following steps 1 and 2, you're worried that your income in retirement won't cover your costs, there are things you can do:</p><ul><li>Get advice — Liverpool Victoria, or 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 can also find an Independent Financial Adviser, or IFA, in your area on the <a href="http://www.unbiased.co.uk" target="_blank" data-sf-ec-immutable="">Unbiased website</a> — just be sure to go with someone who has knowledge and experience in pensions, rather than a generic financial adviser. </li><li>Consider topping up your pension pot — think about paying more into your pension before you stop work if you can. This is known as making Additional Voluntary Contributions (AVCs). It's tax-free up to certain limits </li><li>Think about changing your retirement age — you can delay taking your pension, giving you more time to increase it. This is not a decision to be taken lightly and we suggest you speak with a Financial Adviser first. </li><li>Clear your debts — if possible, try to pay off any debts you owe before you retire </li></ul><p>There are planning tools available to help you see the impact of making some of these changes and help guide you towards your retirement goals. For DB members, this includes a Pension Planner, and for IWDC members, there's a Retirement Modeller. <a href="http://www.railwayspensions.co.uk/login" data-sf-ec-immutable="">Log into your online account</a> to give them a try. <br><br></p><h3>Preparing for the lifestyle change</h3><p>The move from working to retirement can often have an emotional impact, as well as a financial one. <br><br>For those preparing to retire, the British Heart Foundation has a few <a href="https://www.bhf.org.uk/informationsupport/heart-matters-magazine/wellbeing/retirement/retirement-tips" target="_blank" data-sf-ec-immutable="">top tips</a> for making the mental adjustment. This includes:<br><br></p><ul><li>Getting your finances in order</li><li>Winding down gently</li><li>Developing a new routine</li><li>Making a list of the things you'd like to achieve, and;</li><li>Seeking social support</li></ul><p>You'll find further specialist support available from a range of railway-based organisations, including:</p><ul><li><a href="http://www.btpf.org/" target="_blank" data-sf-ec-immutable="">British Transport Pensioners Federation (BTPF)</a>, which protects and maintains the wellbeing of Railway people in retirement</li><li><a href="https://www.railwaybenefitfund.org.uk/" target="_blank" data-sf-ec-immutable="">Railway Benefit Fund (RBF)</a>, an independent charity that supports railway workers and their families through a variety of issues</li><li><a href="https://railwaymission.org/" target="_blank" data-sf-ec-immutable="">The Railway Mission</a>, which operates a chaplaincy service to staff from all sectors and levels of the railway industry</li></ul><p>There's also <a href="https://www.ageuk.org.uk/" target="_blank" data-sf-ec-immutable="">Age UK,</a> which is the UK's largest charity for older people. They provide many local services, aimed at inspiring, supporting and enabling people to get the most from life, and can offer a wide range of information and advice. </p>
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