Blog
A deep-dive into a variety of pension topics to help you understand and learn more about your pension and the Scheme.
15/9/2021
Editorial
<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"></span>For example, you may have chosen <a href="https://member.railwayspensions.co.uk/iwdc-members/managing-investments/fund-choices" data-sf-ec-immutable="" data-sf-marked="">which funds to invest in</a> or have deliberately opted for a more ‘hands-off approach’ and had those funds selected for you.<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>Either way, as you approach retirement, you have a few key decisions you need to make. Perhaps the most important of those are:</p><ul><li><a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/when-to-retire" data-sf-ec-immutable="">When to retire</a> </li><li><a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/how-i-can-take-my-iwdc-pot" data-sf-ec-immutable="">How to take the money in your Personal Retirement Account (PRA) </a> </li></ul><h3>When to retire </h3><p>For most IWDC members, the <strong>Normal Retirement Age (NRA)</strong> is between 60 and 65 years old. If you’re unsure of what your NRA is, you can check it in your Member Guide. This can be found in the library section of your <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">myRPS account</a>.</p><p>You can also take your benefits earlier or later if your prefer. This could be from age 55 (or as early as 50 if you have a Protected Pension Age) up until your 75th birthday. </p><p>You may also be able to start taking your pension earlier if you need to stop work early due to ill-health.</p><p>If you’re invested in a Lifestyle Strategy you should think about choosing a <strong>Target Retirement Age (TRA), </strong>if you haven’t done so already<strong>, </strong>and regularly review your TRA to ensure it remains appropriate for
you. </p><p>A Lifestyle strategy automatically moves your contributions into investment funds which are thought best for your circumstances. The aim is to protect your PRA from sudden swings in the markets, by gradually switching your investments from higher growth
to more stable funds. This process starts ten years before your TRA or your NRA if you haven’t chosen a TRA. You can find out more about the fund choices available <a href="https://member.railwayspensions.co.uk/iwdc-members/managing-investments/fund-choices" target="_blank" data-sf-ec-immutable="" data-sf-marked="">here. </a>You can also find and change your TRA by logging in to your <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">myRPS account</a>.</p><p>When to retire is quite a personal choice and may be affected by other circumstances, and not just when you reach a suitable age. For example it may be a question of whether you feel you can afford to retire. You can read more about getting your savings
on track and the options available to you if the numbers don’t quite add up, such as making Additional Voluntary Contributions (AVCs) <a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/how-much-ill-need" data-sf-ec-immutable="" data-sf-marked="">here</a> </p><p>You can also read more about all of these options, and how they could affect your PRA, <a href="/iwdc-members/im-planning-to-take-my-iwdc-pot/when-to-retire"></a><a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/how-i-can-take-my-iwdc-pot" data-sf-ec-immutable="" data-sf-marked="">here</a></p><h3>How to take your PRA </h3><p>You have 3 main options for taking the money built up in your PRA. </p><ol><li>get a flexible income, taking it a bit at a time. This is known as <a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/understanding-drawdown" data-sf-ec-immutable="" data-sf-marked="">drawdown</a> </li><li>get a regular, secure income, known as an <a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/understanding-annuities" data-sf-ec-immutable="" data-sf-marked="">annuity</a></li><li>take all of the money in your PRA as a cash lump sum. We call this <a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/understanding-encashment" data-sf-ec-immutable="" data-sf-marked="">total encashment</a></li></ol><p>You can find a summary of these options in our short video <a href="https://member.railwayspensions.co.uk/knowledge-hub/help-and-support/video-library" data-sf-ec-immutable="" data-sf-marked="">here</a> </p><p>Each comes with its own different tax implications, benefits and risks, so it’s important you consider your options carefully before making a decision. </p><p>Whichever option you choose, you could decide to take up to 25% of your PRA as a tax-free lump sum. </p><p><img src="https://cdn3.railpen.com/mp-sitefinity-prod/images/default-source/old-site-images/infographics/ifgfx_dc_options-for-using-your-pra_v02_bg-and-title.jpg?sfvrsn=9a646153_7" alt="Graphic showing how you can use your PRA by taking up to 25% as a tax free lump sum and taking the rest as either drawdown, annuity or total encashment"></p><h3><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-size: var(--font-size-h3); text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">Making the right decision for you </span></h3><p>There’s a lot to consider here, but help is at hand.</p><p>You can use the <strong>retirement modeller</strong> in your myRPS account to experiment with your options.</p><p>The modeller works out how much your total pension pot could be when you retire by taking into account the following:</p><ul type="disc"><li>your current age</li><li>salary</li><li>current personal retirement account balance</li><li>Target Retirement Age (TRA)</li><li>contribution rate (this is set automatically depending on which section you’re in)</li><li>any additional contributions (AVCs) already made and expected to be paid in the future </li><li>whether your fund choices are low, medium or high risk</li></ul><p>It also lets you test out the different options for taking your money, such as annuity, drawdown and encashment, to see what impact they would have on your income.</p><p>In addition, the modeller can illustrate the impact on your pension pot and potential benefits at retirement if you make changes to your:</p><ul type="disc"><li>TRA (when you retire) </li><li>contributions</li><li>and/or fund choices</li></ul><p>Once you have this information, you may find it helpful to <strong>speak to a financial advisor</strong></p><p>Liverpool Victoria (LV) has been chosen as the official partner to give RPS members access to financial advice. LV can be contacted on 0800 023 4187. </p><p>You are still free to choose your own Independent Financial Adviser (IFA). You can find an IFA in your area at <a href="https://www.unbiased.co.uk/" target="_blank" data-sf-ec-immutable="">unbiased.co.uk</a></p><p>More free and general information is also available from <span style="text-decoration: underline">MoneyHelper, </span>created by the Government. </p><p>You can also find more tips for making the right decision for you <a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/making-the-right-decision" data-sf-ec-immutable="" data-sf-marked="">here.</a> </p><h3>Applying for your PRA </h3><p>Once you’ve decided how you want to go ahead, you will need to apply for your PRA.</p><p>You can do this by contacting the scheme administrator, Railpen, using the details <a href="/knowledge-hub/help-and-support/get-in-touch">here</a></p><p>What happens after that depends on the ways you’ve chosen to take your PRA. </p><p>For example, neither drawdown nor annuity are offered directly by the RPS, so if you opt for either of these routes you will need to:</p><ul><li>identify a new provider </li><li>contact that provider directly, to set up your new arrangement </li><li>return all of the necessary paperwork to RPMI for processing</li></ul><p>You can read more about applying for your PRA and how to identify a new provider if required <a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/applying-to-take-my-iwdc-pot" data-sf-ec-immutable="" data-sf-marked="">here</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"></span>For example, you may have chosen <a href="https://member.railwayspensions.co.uk/iwdc-members/managing-investments/fund-choices" data-sf-ec-immutable="" data-sf-marked="">which funds to invest in</a> or have deliberately opted for a more ‘hands-off approach’ and had those funds selected for you.<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>Either way, as you approach retirement, you have a few key decisions you need to make. Perhaps the most important of those are:</p><ul><li><a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/when-to-retire" data-sf-ec-immutable="">When to retire</a> </li><li><a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/how-i-can-take-my-iwdc-pot" data-sf-ec-immutable="">How to take the money in your Personal Retirement Account (PRA) </a> </li></ul><h3>When to retire </h3><p>For most IWDC members, the <strong>Normal Retirement Age (NRA)</strong> is between 60 and 65 years old. If you’re unsure of what your NRA is, you can check it in your Member Guide. This can be found in the library section of your <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">myRPS account</a>.</p><p>You can also take your benefits earlier or later if your prefer. This could be from age 55 (or as early as 50 if you have a Protected Pension Age) up until your 75th birthday. </p><p>You may also be able to start taking your pension earlier if you need to stop work early due to ill-health.</p><p>If you’re invested in a Lifestyle Strategy you should think about choosing a <strong>Target Retirement Age (TRA), </strong>if you haven’t done so already<strong>, </strong>and regularly review your TRA to ensure it remains appropriate for
you. </p><p>A Lifestyle strategy automatically moves your contributions into investment funds which are thought best for your circumstances. The aim is to protect your PRA from sudden swings in the markets, by gradually switching your investments from higher growth
to more stable funds. This process starts ten years before your TRA or your NRA if you haven’t chosen a TRA. You can find out more about the fund choices available <a href="https://member.railwayspensions.co.uk/iwdc-members/managing-investments/fund-choices" target="_blank" data-sf-ec-immutable="" data-sf-marked="">here. </a>You can also find and change your TRA by logging in to your <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="">myRPS account</a>.</p><p>When to retire is quite a personal choice and may be affected by other circumstances, and not just when you reach a suitable age. For example it may be a question of whether you feel you can afford to retire. You can read more about getting your savings
on track and the options available to you if the numbers don’t quite add up, such as making Additional Voluntary Contributions (AVCs) <a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/how-much-ill-need" data-sf-ec-immutable="" data-sf-marked="">here</a> </p><p>You can also read more about all of these options, and how they could affect your PRA, <a href="/iwdc-members/im-planning-to-take-my-iwdc-pot/when-to-retire"></a><a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/how-i-can-take-my-iwdc-pot" data-sf-ec-immutable="" data-sf-marked="">here</a></p><h3>How to take your PRA </h3><p>You have 3 main options for taking the money built up in your PRA. </p><ol><li>get a flexible income, taking it a bit at a time. This is known as <a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/understanding-drawdown" data-sf-ec-immutable="" data-sf-marked="">drawdown</a> </li><li>get a regular, secure income, known as an <a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/understanding-annuities" data-sf-ec-immutable="" data-sf-marked="">annuity</a></li><li>take all of the money in your PRA as a cash lump sum. We call this <a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/understanding-encashment" data-sf-ec-immutable="" data-sf-marked="">total encashment</a></li></ol><p>You can find a summary of these options in our short video <a href="https://member.railwayspensions.co.uk/knowledge-hub/help-and-support/video-library" data-sf-ec-immutable="" data-sf-marked="">here</a> </p><p>Each comes with its own different tax implications, benefits and risks, so it’s important you consider your options carefully before making a decision. </p><p>Whichever option you choose, you could decide to take up to 25% of your PRA as a tax-free lump sum. </p><p><img src="https://cdn3.railpen.com/mp-sitefinity-prod/images/default-source/old-site-images/infographics/ifgfx_dc_options-for-using-your-pra_v02_bg-and-title.jpg?sfvrsn=9a646153_7" alt="Graphic showing how you can use your PRA by taking up to 25% as a tax free lump sum and taking the rest as either drawdown, annuity or total encashment"></p><h3><span style="background-color: rgba(0, 0, 0, 0); color: inherit; font-size: var(--font-size-h3); text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">Making the right decision for you </span></h3><p>There’s a lot to consider here, but help is at hand.</p><p>You can use the <strong>retirement modeller</strong> in your myRPS account to experiment with your options.</p><p>The modeller works out how much your total pension pot could be when you retire by taking into account the following:</p><ul type="disc"><li>your current age</li><li>salary</li><li>current personal retirement account balance</li><li>Target Retirement Age (TRA)</li><li>contribution rate (this is set automatically depending on which section you’re in)</li><li>any additional contributions (AVCs) already made and expected to be paid in the future </li><li>whether your fund choices are low, medium or high risk</li></ul><p>It also lets you test out the different options for taking your money, such as annuity, drawdown and encashment, to see what impact they would have on your income.</p><p>In addition, the modeller can illustrate the impact on your pension pot and potential benefits at retirement if you make changes to your:</p><ul type="disc"><li>TRA (when you retire) </li><li>contributions</li><li>and/or fund choices</li></ul><p>Once you have this information, you may find it helpful to <strong>speak to a financial advisor</strong></p><p>Liverpool Victoria (LV) has been chosen as the official partner to give RPS members access to financial advice. LV can be contacted on 0800 023 4187. </p><p>You are still free to choose your own Independent Financial Adviser (IFA). You can find an IFA in your area at <a href="https://www.unbiased.co.uk/" target="_blank" data-sf-ec-immutable="">unbiased.co.uk</a></p><p>More free and general information is also available from <span style="text-decoration: underline">MoneyHelper, </span>created by the Government. </p><p>You can also find more tips for making the right decision for you <a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/making-the-right-decision" data-sf-ec-immutable="" data-sf-marked="">here.</a> </p><h3>Applying for your PRA </h3><p>Once you’ve decided how you want to go ahead, you will need to apply for your PRA.</p><p>You can do this by contacting the scheme administrator, Railpen, using the details <a href="/knowledge-hub/help-and-support/get-in-touch">here</a></p><p>What happens after that depends on the ways you’ve chosen to take your PRA. </p><p>For example, neither drawdown nor annuity are offered directly by the RPS, so if you opt for either of these routes you will need to:</p><ul><li>identify a new provider </li><li>contact that provider directly, to set up your new arrangement </li><li>return all of the necessary paperwork to RPMI for processing</li></ul><p>You can read more about applying for your PRA and how to identify a new provider if required <a href="https://member.railwayspensions.co.uk/iwdc-members/im-planning-to-take-my-iwdc-pot/applying-to-take-my-iwdc-pot" data-sf-ec-immutable="" data-sf-marked="">here</a></p>
Blog
Your retirement options with IWDC
As a member of the Industry-Wide Defined Contribution (IWDC) section you may be used to making decisions about your pension.
For example, you may have chosen which funds to invest in or have deliberately opted for a more ‘hands-off approach’ and had those funds selected for you.
Either way, as you approach retirement, you have a few key decisions you need to make. Perhaps the most important of those are:
When to retire
For most IWDC members, the Normal Retirement Age (NRA) is between 60 and 65 years old. If you’re unsure of what your NRA is, you can check it in your Member Guide. This can be found in the library section of your myRPS account.
You can also take your benefits earlier or later if your prefer. This could be from age 55 (or as early as 50 if you have a Protected Pension Age) up until your 75th birthday.
You may also be able to start taking your pension earlier if you need to stop work early due to ill-health.
If you’re invested in a Lifestyle Strategy you should think about choosing a Target Retirement Age (TRA), if you haven’t done so already, and regularly review your TRA to ensure it remains appropriate for you.
A Lifestyle strategy automatically moves your contributions into investment funds which are thought best for your circumstances. The aim is to protect your PRA from sudden swings in the markets, by gradually switching your investments from higher growth to more stable funds. This process starts ten years before your TRA or your NRA if you haven’t chosen a TRA. You can find out more about the fund choices available here. You can also find and change your TRA by logging in to your myRPS account.
When to retire is quite a personal choice and may be affected by other circumstances, and not just when you reach a suitable age. For example it may be a question of whether you feel you can afford to retire. You can read more about getting your savings on track and the options available to you if the numbers don’t quite add up, such as making Additional Voluntary Contributions (AVCs) here
You can also read more about all of these options, and how they could affect your PRA, here
How to take your PRA
You have 3 main options for taking the money built up in your PRA.
- get a flexible income, taking it a bit at a time. This is known as drawdown
- get a regular, secure income, known as an annuity
- take all of the money in your PRA as a cash lump sum. We call this total encashment
You can find a summary of these options in our short video here
Each comes with its own different tax implications, benefits and risks, so it’s important you consider your options carefully before making a decision.
Whichever option you choose, you could decide to take up to 25% of your PRA as a tax-free lump sum.
Making the right decision for you
There’s a lot to consider here, but help is at hand.
You can use the retirement modeller in your myRPS account to experiment with your options.
The modeller works out how much your total pension pot could be when you retire by taking into account the following:
- your current age
- salary
- current personal retirement account balance
- Target Retirement Age (TRA)
- contribution rate (this is set automatically depending on which section you’re in)
- any additional contributions (AVCs) already made and expected to be paid in the future
- whether your fund choices are low, medium or high risk
It also lets you test out the different options for taking your money, such as annuity, drawdown and encashment, to see what impact they would have on your income.
In addition, the modeller can illustrate the impact on your pension pot and potential benefits at retirement if you make changes to your:
- TRA (when you retire)
- contributions
- and/or fund choices
Once you have this information, you may find it helpful to speak to a financial advisor
Liverpool Victoria (LV) has been chosen as the official partner to give RPS members access to financial advice. LV can be contacted on 0800 023 4187.
You are still free to choose your own Independent Financial Adviser (IFA). You can find an IFA in your area at unbiased.co.uk
More free and general information is also available from MoneyHelper, created by the Government.
You can also find more tips for making the right decision for you here.
Applying for your PRA
Once you’ve decided how you want to go ahead, you will need to apply for your PRA.
You can do this by contacting the scheme administrator, Railpen, using the details here
What happens after that depends on the ways you’ve chosen to take your PRA.
For example, neither drawdown nor annuity are offered directly by the RPS, so if you opt for either of these routes you will need to:
- identify a new provider
- contact that provider directly, to set up your new arrangement
- return all of the necessary paperwork to RPMI for processing
You can read more about applying for your PRA and how to identify a new provider if required here
