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<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">&nbsp;</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">Nobody likes to imagine getting older, so many of us choose to ignore our pensions.&nbsp; It’s nothing new, but it’s unwise. A recent study* has found two-thirds of adults retiring in 2021 in the UK won’t have enough in their pension to fund their post-work life. Many people are now facing a difficult retirement.</span> <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><br></p><h2>Women especially should consider their position<br></h2><p>Society and family structures have changed hugely since the UK pension system was first created in the early 1900s. The traditional nuclear family was the norm, with men typically earning the money and women raising the children at home. But now, this family model has changed. There are more women than ever in the workplace, there are many single-parent families and different family structures.</p><p>According to a report published by Barnett Waddingham in March 2021**, women who take time off work have fewer pension savings than women who don’t.</p><p>For a woman taking two 12 month career breaks in her early 30s, with no pension savings or salary increase during this time, it can lead to a level of pension savings at retirement of around 10% lower compared to a woman with no career breaks.</p><h2>Lack of pension parity for women<br></h2><p>It’s not just career breaks that impact women’s pension savings. The report found that the pension gap between men and women is most stark in the high affluence group – typically because men’s pay in this group is significantly higher than women’s.</p><p>There are many more contributing factors, including:</p><ul><li>Taking on caring responsibilities for children, ageing parents or other family members typically gives less flexibility for many women to progress in their careers, earn more and contribute more to workplace pensions;</li><li>The imbalance of women working in lower paid or lower skilled occupations;</li><li>Women are more likely to be on zero-hour contracts or working multiple part-time roles so do not reach workplace pension auto-enrolment thresholds;</li><li>The increasing rates of divorce, particularly in later life;</li><li>The low level of default contribution rates in general.</li></ul><h2>Will you have enough for the retirement you want?<br></h2><p>Women in particular should carefully consider their options well before retirement, and whether they have enough saved to maintain their current lifestyle. </p><p>Our planning tools can help. &nbsp;</p><p>When you log in, or register for an account, you will see two modellers in the ‘Planning for the future’ section of your ‘myRPS account’.</p><ul><li>Defined benefit members can use the <strong>pension planner</strong></li><li>IWDC members can use the <strong>retirement modeller</strong>.</li></ul><p>All members can then use the <strong>retirement budgeting calculator</strong> to find out if your current level of pension benefits and/or savings will be enough, or whether you might want to make adjustments.</p><p>You can use the calculator together with your latest benefit statement, or <strong>request an estimate. </strong>It’s free to do, you can request as many as you like, and the estimate is usually ready within an hour. </p><p>These planners will show you what your annual income is likely to be when you retire. As a rough guideline, current research shows you will need between £10,200 (basic) to £33,000 (comfortable) per year when you finish work.</p><p>The Retirement Living Standards are benchmarks for the income you might need in order to afford different lifestyles - minimum, moderate and comfortable. Full details can be found at <a href="http://www.retirementlivingstandards.org.uk/" data-sf-ec-immutable="">retirementlivingstandards.org.uk</a>. But as a general rule, they suggest the following:</p><img src="00ddcd22-bb33-4a45-9ba4-28b0d6aff300" 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" alt="retirement Living Standards are benchmarks for how much you might need in retirement based on a minimum, moderate or comfortable lifestyle"><p><br>It’s never too early – or too late- to start making extra contributions to your pension savings.</p><h2>How to save more with Additional Voluntary Contributions</h2><p>Additional Voluntary Contributions (AVCs) are flexible extra pension savings you can make from your pay (before tax is taken) on top of the normal contributions you make to your pension.</p><ul type="disc"><li>One of the perks of AVCs is that you don’t need to save a set amount every month. If you’ve got an expensive time coming up, you can reduce your contributions, or equally you can add more in if you have some to spare.&nbsp;</li><li>AVCs are a great way to save extra money for retirement if you get large payments that don’t qualify for your pension, such as overtime and bonus payments.</li><li>You’ll also get government tax relief on anything you put in up to your annual allowance - currently £40,000 for most people. &nbsp;If you’re a high earner with an income of more than £200,000 a year, your annual allowance might gradually reduce to as low as £4,000 in the current tax year.</li></ul><h2>AVCs for defined benefit members</h2><p>The main AVC arrangement open to defined benefit (DB) members is called BRASS. When you join the Scheme, you’ll get a separate BRASS account, and your AVC contributions are then invested in a range of funds with the aim of building up extra pension savings over time.</p><p>&nbsp;You’ll be able to&nbsp;<a href="https://member.railwayspensions.co.uk/my-rps" data-sf-ec-immutable="">log in to your account</a>&nbsp;(or&nbsp;<a href="https://member.railwayspensions.co.uk/register" data-sf-ec-immutable="">register</a>) any time to:</p><ul><li>make changes to the BRASS amount you contribute</li><li>view your investment fund holdings</li><li>see how the funds are performing​</li><li>change the funds you invest in.</li></ul><h2>How much more should I save?</h2><p>If you’ve used the planning tools, you’ll have a better idea of how much more to save, to have the retirement you imagined. </p><p>Some employers allow contributions to be paid via a ‘salary sacrifice’ arrangement, which reduces your National Insurance bill. And they may even increase the amount they pay into the scheme if you choose to save more. It’s worth checking! </p><p>Most members making additional voluntary contributions pay in more than £100 per month, but you can put in as little as £10 per month and top up your regular payments or make one-off payments at any time. No matter how big or small your contribution, it all helps.</p><p>There is a maximum amount that you can pay into BRASS. If you want to pay more AVCs, most members can apply to join AVC Extra. <a href="/knowledge-hub/help-and-support/RAYN">Check the Read as you Need guides</a> for the rules that apply to your section of the Scheme.</p><h2>AVCs for IWDC members</h2><p>If you’d like to make extra contributions, you’ll need to speak to your employer. The contributions will be deducted from your pay like your usual pension deductions. </p><p>Get more information on BRASS and AVC Extra <a href="/defined-benefit-members/saving-more-BRASS-AVC-Extra">here</a>.<span style="text-decoration: underline"></span></p><h2>What if the numbers don’t add up?</h2><p>The more you save now, the more time your money has to grow. Over the long-term, the investment returns on your AVCs could make a big difference to the amount you have to live on when you retire.</p><h2>Get advice before making any decisions. </h2><p>We can help you understand the Scheme rules that apply to you and tell you how it works, but we can’t give you advice relating to your personal circumstances. If you need help deciding what to do with your money, you’ll need to talk to a financial advisor. </p><p>Liverpool Victoria has been carefully chosen to give members access to independent financial advice. LV can be contacted on 0800 023 4187. </p><p>You are still free to choose your own Independent Financial Adviser. You can find an IFA in your area at <strong><a href="https://www.unbiased.co.uk/" target="_blank" data-sf-ec-immutable="">unbiased.co.uk</a></strong></p><p><strong><a href="https://www.moneyhelper.org.uk/en" target="_blank" data-sf-ec-immutable="">Moneyhelper.org.uk</a> </strong>offers free support on a wide range of financial matters, online and over the phone.</p><p>And there’s a wealth of information in the <strong>‘</strong><strong>Resources</strong><strong>’</strong> and <strong>‘In the Scheme’</strong> sections of the RPS website.</p><h3>Sources</h3><p><strong>*</strong>&nbsp; <a href="https://www.aberdeenplc.com/en-gb/news/all-news/uk-retirees-at-risk-of-running-pension-pots-dry" target="_blank" data-sf-ec-immutable="" data-sf-marked="">UK retirees at risk of running pension pots dry</a> </p><p>**&nbsp;<a href="https://www.barnett-waddingham.co.uk/comment-insight/research/gender-pension-gap/" target="_blank" data-sf-ec-immutable="">Bridging the gap: the gender pension gap and what can be done about it</a></p><p>&nbsp;</p>

<p>By the time you reach your 50s you may have a pretty good idea of what you want later life to look like for you. Retirement doesn’t probably feel like a distant concept anymore and you’re starting to give it a lot more thought these days.&nbsp;<br></p><p>If you’re only just embarking on your pension saving journey, you still have a good few years to prioritise retirement planning and to save up for a decent life after work. <br></p><p>Whatever your situation, your 50s is the ideal time to up your saving game and to make the most of the opportunities available to you. Here are a few ideas to help you enhance your pension saving journey and to make sure your retirement savings are on track to provide you with the sort of lifestyle you hope for when you stop work.</p><p>&nbsp;</p><h3>Define your retirement goals<br></h3><p>If you haven’t yet given later life a thought, do it now. How do you imagine your lifestyle? You’d probably want to enjoy some treats now and then like a holiday abroad, meals out and taking up new hobbies. Will you have any caring responsibilities or will you want to support a family member financially? <br></p><p>Crystallising your retirement goals now you still have a few years to save up may be just what you need to ensure you have enough to fund them when the time comes. <br></p><p><a href="https://www.retirementlivingstandards.org.uk/" data-sf-ec-immutable="">The Retirement Living Standards</a>* can help you with that. They have been developed to help you picture what kind of lifestyle you could have in retirement. The standards show you what life in retirement looks like at 3 different levels, and what a range of common goods and services would cost for each level. For example, a single person will need approximately £37,300 per year for a comfortable standard of living when they finish work. <br></p><p>If your current level of saving isn’t on target to pay for the standard of living you hope for in retirement, you may need to think about saving more. One way to do this is by paying Additional Voluntary Contributions (AVCs).</p><p>&nbsp;</p><h3>Consider boosting your savings with AVCs<br></h3><p>You may want to consider paying extra into your pension, if you can. Paying even a little more in to your pension savings now could eventually add up to a lot more to enjoy when you stop work. AVCs provide a real opportunity to build up your savings and make up for lost time.<br></p><p>The main <a href="/defined-benefit-members/saving-more-BRASS-AVC-Extra">AVC arrangement for defined benefit (DB) members</a> of the Railways Pension Scheme is called BRASS. You can pay as little as £2 per week or £10 per month on top of the normal contributions you make to your pension. There’s a maximum you can pay in each year – usually 15% of your gross earnings. If you want to pay more than the BRASS maximum, you can join AVC Extra (not available to Network Rail members). <br></p><p><a href="/iwdc-members/Im-still-working/saving-more">Defined contribution (IWDC) members pay AVCs</a> directly into their investment accounts. <br></p><p>There are many benefits to saving extra with AVCs:<br></p><ul><li>you can save as little as £2 a week</li><li>you don’t need to save a set amount every month</li><li>you can pay into AVCs with money from overtime and bonuses, which don’t qualify for your main scheme pension</li><li>you get tax relief on what you put in (up to Annual Allowance tax limits)<br></li></ul><p>To see how much your RPS income will be, log in to (or register for) your <a href="https://member.railwayspensions.co.uk/login" data-sf-ec-immutable="" data-sf-marked="">myRPS account</a>. Use the ‘Pension Planner’ to model how saving more with BRASS could make a big difference and help you meet your target. <br></p><p>You should also bear in mind that for the 2023-24 tax year there’s an annual pension savings limit that can benefit from tax relief of £60,000 or the value of your taxable earnings, whichever is lower. Read more about this limit below.</p><p><br></p><h3>Are you making the most of your Annual Allowance?</h3><p>Annual Allowance is the limit on the total amount you can save towards your pension in a single tax year before you pay any tax on your pension savings. It is currently either 100% of your annual earnings or £60,000, whichever is lower, unless the Tapered Annual Allowance** applies to you.</p><p>The Annual Allowance renews at the start of every financial year (in April) so it may be worth paying in as much as you can over the next few years to make sure your savings are benefitting from tax relief. Saving tax free for your future is one of the most valuable benefits of paying in a workplace pension and it’s worth taking advantage of all the pros that come with it. That doesn’t mean paying in the full allowance, but paying in as much as is realistic and possible for you at this moment in time. </p><p>You may also be able to carry forward any unused allowances from the last three years.</p><p>&nbsp;</p><h3>Your pension savings are invested so compounding is a big plus!<br></h3><p>We’ve covered compounding in previous articles from the pension planning series but we can’t miss to highlight its valuable role in making your money grow, especially now you’re approaching the end of your working life. It’s a key factor when it comes to investing and one of the most significant benefits of having your money invested in a pension. <br></p><p>It is essentially the process of your investments achieving growth not just on the original sum invested but on the growth of it as well. It’s especially powerful if your money has been invested for a while but even if you start saving for a pension now, it will help your money grow. <br></p><p>Compounding only applies to members in the Industry-Wide Defined Contribution (IWDC) scheme and members who pay in Additional Voluntary Contributions (AVCs) towards their pension.</p><p><br></p><h3>Re-evaluate your attitude to risk<br></h3><p>If you’ve been saving into an IWDC pot or with AVCs for a while, you may want to consider reviewing your investment fund choices now you’re on a down track to retirement. You may have had a riskier approach so far, but it’s perhaps time to reduce your exposure to higher risk funds to ensure you’re not taking any unnecessary risks. The value of money invested can go up as well as down so it’s important to ensure the savings you’ve accumulated to date are ‘safer’ being invested in more ‘stable’ funds which have lower risk of losing value over time.</p><p><br></p><h3>Turn to Pension Wise for free guidance<br></h3><p>Pension Wise, a government-backed service helping people to understand the pension options available to them, offers free, impartial guidance for over 50s. You can book an hour-long appointment with one of their pensions specialists and they’ll talk you through the options available to you and any other things you may need to keep in mind in the run up to retirement.</p><p><br></p><h3>Speak to a financial adviser <br></h3><p>You may want to seek expert financial advice if you have little or no experience of managing your pension and extended finances and don’t feel confident in making decisions about them. Go to <a href="https://www.unbiased.co.uk/" data-sf-ec-immutable="">https://www.unbiased.co.uk/</a> to find an Independent Financial Adviser (IFA) who could help you take control of your financial future.</p><p>&nbsp;</p><p><br></p><p><em>*Retirement Living Standards – the Standards have been developed by the People and Lifetime Savings Association (PLSA) and provide a rule of thumb guidance on common costs for three different levels of expenditure in retirement to help pension savers understand how much money they will need to live the lifestyle they want in retirement <a href="https://www.retirementlivingstandards.org.uk/" data-sf-ec-immutable="">https://www.retirementlivingstandards.org.uk/</a> </em><br></p><em></em><p><em>**Tapered Annual Allowance - 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.&nbsp;It may affect you if your income is over £260,000 (previously £240,000) from 6 April 2023.</em></p>

<p>The 2023-24 tax year ends on 5 April 2024.</p> <p>Here’s some of the reasons you might consider saving more before the tax year is up. And a few top tips on how you can do it, including making <a href="https://member.railwayspensions.co.uk/pension-essentials/saving-more">Additional Voluntary Contributions (AVCs).</a></p> <p>We can’t help decide what’s best for you, but the below information should make sure you have the information you need to make a decision.</p> <h2>Why you might want to save more:</h2> <h4>Use up your Annual Allowance (AA)</h4> <p>The <a href="https://member.railwayspensions.co.uk/pension-essentials/pension-tax-limits">Annual Allowance (AA)</a> is the limit on your pension savings that benefit from tax relief each year. It means the most you can save tax-free towards all your pension arrangements in a single tax year is the lower of either 100% of your earnings, or £60,000. Unless you’re affected by the <a href="https://member.railwayspensions.co.uk/pension-essentials/pension-tax-limits">Tapered Annual Allowance (TAA)</a>, or the <a href="https://member.railwayspensions.co.uk/pension-essentials/pension-tax-limits">Money Purchase Annual Allowance (MPAA).</a></p> <p>When the new tax year starts, your Annual Allowance will renew. So, if you can afford to, you might think about paying more into your Railways Pension Scheme (RPS) pension now, to use up your remaining Annual Allowance before the new tax year.</p> <p>If you’ve used your Annual Allowance for this tax year, you can carry forward any unused Annual Allowance from the previous 3 years. This may mean you can pay more into your pension, without having to pay an extra tax charge. </p> <h4>To make the most of tax relief</h4> <p>A fantastic thing about saving with your RPS pension is that its tax efficient, because the money you pay in is taken from your salary before tax is deducted. This means you pay less tax on your salary.</p> <p>For example, if you’re a basic-rate tax payer (who pays 20% income tax) and want to put £100 into your pension, it would actually only cost you £80. That’s because the other £20 comes from tax relief.</p> <p>If you’re a higher-rate tax payer you’ll get 40% tax relief, and additional-rate tax payers get 45%. But there are limits on the amount of pension saving that benefit from tax relief each year. <a href="https://member.railwayspensions.co.uk/pension-essentials/pension-tax-limits">You can learn about the limits here</a>. </p> <h4>To make use of any spare cash</h4> <p>If you’ve received a bonus, a monetary gift or if you have some cash to spare, why not consider doing a good thing for your future by paying it into your pension? </p> <h4>Hold onto your tax-free Personal Allowance</h4> <p>Your Personal Allowance is the amount of income you don’t have to pay tax on. The standard Personal Allowance for the 2023-24 tax year is £12,570.</p> <p>Did you know, your Personal Allowance reduces by £1 for every £2 that your income is above £100,000. And, if you have an income of £125,140 or above, you do not get a Personal Allowance. You can <a href="https://www.gov.uk/income-tax-rates" target="_blank">learn more about this at Gov.uk</a>.&nbsp;</p> <p>It’s handy to know the money you pay into your pension doesn’t count as an income. So, you might think about paying more into your pension to keep your Personal Allowance, and save more for your future. </p> <h4>Keep your Child Benefit if you’re a working parent </h4> <p>Child Benefit can help you with the costs of your children. And, as the cost-of-living increases, every penny helps to meet the demands of busy family life.&nbsp;</p> <p>If you or your partner earn over £50,000 a year, you may have to pay the <a href="https://www.gov.uk/child-benefit-tax-charge" target="_blank">High Income Child Benefit Charge</a>. And if you earn over £60,000, due to the tax charge, it’s likely you’ll end up with no extra money from Child Benefit. To see if this applies to you, try the government’s <a href="https://www.gov.uk/child-benefit-tax-calculator" target="_blank">Child Benefit tax calculator</a>.</p> <p>Remember, the money you pay into your pension doesn’t count as an income. So to get your Child Benefit back, you might think about paying more money into your pension, and save more for your loved ones’ future at the same time.</p> <p>Plus, you’ll automatically get National Insurance (NI) credits if you claim Child Benefit and your child is under 12. The amount of State Pension you’ll get is based on the amount of qualifying years on your NI record, so claiming your Child Benefit could help build up your qualifying years.</p> <h2>How you can save more:</h2> <p>Saving more into your pension while you’re working could mean you have more money when you retire. Here’s a few ideas for how you can do it…</p> <h4>Boost your savings with Additional Voluntary Contributions (AVCs)</h4> <p>You can <a href="https://member.railwayspensions.co.uk/pension-essentials/saving-more">save more into your RPS pension by making AVCs</a>. These extra payments are made on top of your normal pension contributions to help boost your savings even further. And, making AVCs could help you use up your Annual Allowance. You’ll get tax relief on your AVCs, just like you do with your regular pension contributions.</p> <p>You can make regular AVCs, or one-off payments if you prefer. The great thing about AVCs is that you can decide how much you want to pay in, starting from as little as £2 a week or £10 a month. And, you can stop paying AVCs at any time.</p> <p>If you’re a defined benefit (DB) member the main AVC arrangement is BRASS, and you can <a href="https://member.railwayspensions.co.uk/iwdc-members/Im-still-working/saving-more">learn how it works here</a>. If you're an&nbsp;Industry-Wide Defined Contribution (IWDC) member,&nbsp;<strong></strong><a href="https://member.railwayspensions.co.uk/iwdc-members/Im-still-working/saving-more">you can learn how to save more here</a>.</p> <h4>Check your State Pension and consider voluntary contributions </h4> <p>The full new State Pension for 2023-24 is currently £203.85 per week, that’s around £10,600 a year. But, if you have gaps in your NI record, it might mean you’re unable to get your full State Pension entitlement. You can <a href="https://www.gov.uk/check-national-insurance-record" target="_blank">check your NI record here</a>.</p> <p>If you have a shortfall in NI qualifying years, you may be able to build up your NI record by paying voluntary contributions, if you’re eligible.</p> <p>There’s no time like the present to check if you’re eligible to pay voluntary contributions, as the deadline is 5 April each year. You can normally buy up to 6 years. But, until 5 April 2025, you may be able to buy any missing NI years from 2006 to 2016. You can learn more about <a href="https://www.gov.uk/new-state-pension/your-national-insurance-record-and-your-state-pension" target="_blank">gaps in your NI record, and making voluntary contributions here</a>. </p> <h4>Create some positive pension habits</h4> <p>There are other ways to maximise your pension savings, even if you can’t afford to pay more in at the moment. You could make some positive pension habits, such as:</p> <ul> <li>Making a regular note in your diary to <a href="https://member.railwayspensions.co.uk/login">log into your myRPS account</a> and manage your pension</li> <li>Requesting a free estimate of your pension benefits to see what you might expect in future</li> <li>Reviewing your investments, if you have them</li> <li>Taking <a href="https://member.railwayspensions.co.uk/pension-essentials/guidance-advice">financial guidance or advice</a> where needed</li> </ul> <p>For ideas to help you manage your money, you can use the MoneyFit tool in your myRPS account. It gives you a personal action plan with helpful tips and advice, to help you free up more money and save more into your pension. It’s completely anonymous, and free of charge. <a href="https://member.railwayspensions.co.uk/login">Log in to try MoneyFit today.</a> </p>