Getting the money you’ve been saving as an income for life and a lump sum is a big moment.
When you decide to do that, it’s about working out what you’ll need, and when you’ll need it.
What will I get when I retire?
What you’ll get from the Collective Plan is built up in two ways: an income for life, and a one-off lump sum.
If you’ve been with Royal Mail for a while, you probably have other Royal Mail pensions too.
Saving enough means different things to different people.
This can be a difficult aspect of pension planning to think about
But it’s an important part of looking after your loved ones, and their future too.
Pension plans often have what’s known as a ‘Normal Retirement Age’. That’s 67 for the Collective Plan.
You don’t have to get your income for life and lump sum at age 67 though – you can get them earlier (or later if you continue to work for Royal Mail) - but you will have to get them at the same time. If you decide to get them earlier, they are likely to be reduced to take account of the fact that they will have been invested for less time, and you are likely to receive the income for life for a longer period than if you waited until age 67.
Getting your income for life and lump sum
Retiring at your Normal Retirement Age means you’ll get the full amount as set by the Collective Plan subject to the adjustments each year up to age 67. |
If you have stopped working for Royal Mail and/or stopped paying into the Collective Plan before age 67 - you have to get your income for life and lump sum by age 67. If you don’t get your income for life and lump sum before you turn age 67, these will automatically be put into payment on your 67th birthday. Make sure to contact the Pensions Service Centre and complete the retirement forms before your 67th birthday, so they know where to make the payments. If we’re unable to put your income for life into payment at age 67, you will not get anything extra. You could receive backdated payments for missed payments up to a period of six years.
If you’re still working for Royal Mail and still paying into the Collective Plan –your income for life and lump sum won’t be automatically put into payment at age 67. They will be put into payment once you stop working, so make sure to contact the Pensions Service Centre and complete the retirement forms before your last working day, so they know where to make the payments.
Whether you are paying into the Collective Plan or not, the Pensions Service Centre will contact you about 4 to 5 months before you turn age 67 to let you know what you could get and how to get your income for life and lump sum.
Retiring early means your income for life and lump sum will normally be reduced, because the amount you’ve built up will need to last longer and the Collective Plan hasn’t had as long to get returns on the Collective Plan’s investments. If you’re still working for Royal Mail, you’re likely to get less than what you would’ve got at age 67, as you will have spent less time paying into the Collective Plan, so there’s less saved towards your income for life and lump sum. |
You can usually get your income for life and lump sum any time from the minimum pension age set by the government (currently 55 and expected to rise to 57 from 2028). But it’s worth noting that, depending on your circumstances, either Royal Mail or the Trustees have the right to refuse payment of your income for life and lump sum before age 67.
You’ll need to let the Pensions Service Centre know if you want to get your income for life and lump sum before age 67.
You may also be able to get your income for life or lump sum early (before age 55) because of ill health too.
Retiring later means you will keep building up your income for life and lump sum past age 67 – subject to the adjustments each year. |
If you have stopped working for Royal Mail and/or stopped paying into the Collective Plan before age 67 - you must get your income for life and lump sum at age 67 at the latest. If we’re unable to put your income for life into payment at age 67, you will not get anything extra. You could receive backdated payments for missed payments up to a period of six years.
If you’re still working for Royal Mail and still paying into the Collective Plan - you can continue to build up your income for life and lump sum after age 67, until you stop working for Royal Mail or stop paying into the Collective Plan (whichever comes first). But, you won’t get any enhancement to the income for life or lump sum built up to age 67 by getting them after age 67.
There’s no upper limit on what age you can get your income for life and lump sum – as long as you keep working for Royal Mail and pay into the Collective Plan. If you do plan on working beyond age 75 (it does happen sometimes!) then reaching age 75 can affect your pension arrangements and the tax savings you’re able to make, so the Trustee recommends thinking carefully and considering taking independent financial advice if you’re planning on staying in the Collective Plan beyond age 75. Visit MoneyHelper for more information.
You’ll need to let the Pensions Service Centre know when you’re ready to get your income for life and lump sum after age 67.
Page last updated 1 May 2024
An income for life
For each year you pay, this will be:
1/80th
of your pensionable pay in that year, based on your getting it at age 67.
A one-off lump sum
For each year you pay, this will be:
3/80th
of your pensionable pay in that year, based on you getting it at age 67.
What you’ll get: your income for life and lump sum
Every year from 2025, we’ll send you a snapshot that shows you:
how much income for life and lump sum you’ve got saved so far, and
what you might get at age 67.
Every year, starting from 2026, we’ll also let you know:
if your lump sum has gone up or stayed the same.
You can find a summary about how your income for life and lump sum are adjusted each year on this website or more detailed information on pages 14 to 15 of the Scheme Design Statement.
What you’ll get is also linked to the age that you choose to get your income for life and lump sum.
And remember, you can also pay a 1% booster towards your lump sum (that will be matched by Royal Mail) and/or pay Additional Voluntary Contributions (AVCs) into a separate personal pot if you want to increase what you’ll get when you come to retire.
What you’ll get – your Additional Voluntary Contributions (AVCs)
If you’ve made AVC payments, you’ll receive a statement from Scottish Widows each year from 2025 that shows you:
how much you’ve saved in your AVC pot, and
what you might get at age 67.
For more information about your AVCs, and what you might get from them at retirement, go to the AVC Handbook.
Page last updated 1 May 2024
You might also have other workplace pensions or savings in your own personal pension.
Knowing how these all fit together is an important part of planning for your future.
Here’s an overview of some of the Royal Mail pension plans:
Royal Mail pension | Service | What this is |
|---|---|---|
Before 1 April 2012 | These are the benefits that transferred to RMSPS from the RMPP under the Postal Services Act 2011. You stopped building these benefits up in 2012 but they will continue to be paid in the same way. | |
1 April 2012 to 6 October 2024 | These are benefits you built up after 2012. You stop building these benefits up on 6 October 2024 but they will continue to be paid in the same way. |
Royal Mail pension | Service | What this is |
|---|---|---|
1 April 2008 to 6 October 2024 | You and Royal Mail stop paying into the RMDCP on 6 October 2024* - but your pot is still invested to give it a chance to grow. If you paid in any AVCs to this plan, they would have gone into the same pot. | |
Available to employees after 5 years’ service and who chose to join | You stop building these benefits up on 6 October 2024 but they will continue to be paid in the same way. |
*You could remain in the Scheme longer if you had less than 12 months service with Royal Mail on this date.
Royal Mail pension | Service | What this is |
|---|---|---|
Available to employees with less than 12 months’ service, or who have opted out of the Collective Plan | You and Royal Mail pay into a pot, and it is invested to give it a chance to grow. | |
Available to employees with more than 12 months’ service from 7 October 2024 | You’ll find more information about the Collective Plan on this website. |
Transferring other pensions into the Collective Plan
Currently, you are not able to transfer other pensions into the Collective Plan. If this changes in the future, we will update the information shown here.
Don’t forget about the State Pension
Most people are able to claim a State Pension, which is funded by your National Insurance contributions. It’s not means tested, so paying into the Collective Plan won’t affect the amount you get from your State Pension.
The amount you get depends on how many qualifying years of National Insurance contributions you have when you reach your State Pension Age.
The State Pension can be a complicated area. How much you’ll get and when you’ll be entitled to it depends on when you were born, and how much National Insurance you’ve paid.
Thankfully, you can login into your Government Gateway account to find out what State Pension you've got so far, what you're likely to get and when.
Any other pension savings you may have
Don’t forget to think about any other workplace pensions you may have – if you’ve lost touch with them, you can use the Government’s pension tracing service to track them down.
Page last updated 1 May 2024
It depends on so many things:
What you can afford, what you need in retirement, what other income you will have in retirement, and how you plan to use what you get from the Collective Plan when the right time comes.
Start by asking yourself some key questions while you’ve got a bit of time to make changes if you need to.
When do you want to get your income for life and lump sum?
When you want to get these will help you think about how long you might need your money to last, and whether you’ll need to save more.
What sort of budget will you need and will you spend more or less on in retirement?
Think about the big things like mortgage or rent, council tax, food and bills. Give some thought to costs that might fall away in retirement, like commuting on train or petrol costs, or your mortgage. Don’t forget that you might want to spend more on doing the things you love in life, like costs for trips away.
Remember that although the aim is for your income for life to go up over time, it could stay the same or get smaller too.
Do you know when you’ll get your State Pension?
For most people, the State Pension will form a big part of their income at their State Pension age. Make sure you think about your State Pension when you’re considering whether you’re saving enough – it might help get you where you want to be.
And, do you know how your other pensions fit in?
Your other pensions, and any other income you expect to get in retirement, will contribute to your savings and what you get when you take them. Think about your other workplace or personal pensions when you’re working out if you’re saving enough. You should also think about when these other pensions will be paid to you.
Do you know about your tax allowances?
Limits on tax relief are important to think about when you’re considering what you’re saving, and whether it’s enough.
Page last updated 1 May 2024
What your loved ones are entitled to depends on whether you’re still working for Royal Mail or have started getting your income for life.
Your income for life (to an eligible dependant, other than a child)
Half (50%) of what you’ve built up as an income for life at the date of your death will go to your eligible dependant(s), if you have one.
Plus, if you have children
If you have one eligible child, they’ll get a quarter (25%) of what you’ve built up as an income for life too. If you have more than one child who’s eligible, half (50%) of what you’ve built up will be shared between them. These incomes are payable for so long as the children remain eligible.
But, just like how your income for life is adjusted each year, the amount your dependants will get each month as an income for life will be adjusted every year – so what they will get will go up, or down or stay the same each year. We will let them know every year what they’ll get for the next 12 months.
Your lump sum
The amount you’ve built up as a lump sum (including any booster payments you and Royal Mail have made), will be paid as a lump sum to your dependant(s) too.
Take a look at the Collective Plan’s Handbook for more information about how we define child and dependant.
If you die after you’ve started getting your income for life your dependants may get some of your income too. Find out more about what happens to your income for life when you die, once you’re already getting it.
This is known as ‘death in service’.
If you die when you’re working for Royal Mail and you’re paying into the Collective Plan, a one-off, cash lump sum of 4x your pensionable pay will be paid to your dependants. This won’t necessarily come directly from the Collective Plan.
If you are a member of the Royal Mail Pension Plan (RMPP) and/or Royal Mail Statutory Pension Scheme (RMSPS), and you receive any death in service benefit which is due from the RMPP and/or RMSPS, the Collective Plan will only top up any difference, if the amount due from the RMPP and/or RMSPS is lower than the 4x your pensionable pay due from the Collective Plan.
Take a look at the Collective Plan’s Handbook for more information about how we define child and dependant.
If you work for Royal Mail but are not paying into the Collective Plan, contact Royal Mail’s HR Services for information about your ‘death in service’ benefit.
Page last updated 1 May 2024
We can’t give you any advice about your pension as we’re not allowed to – and nor can Royal Mail.
But you can get that advice, or some guidance, from other places if you’d like more support making decisions when you get to that stage.
Guidance and advice are different things, so it’s important to work out what you need.
Guidance is often free, but it’s not always tailored to you. It points you in the right direction, but doesn’t tell you what to do, or what you need to do next.
If you have a question about your pension
MoneyHelper is part of the Money and Pensions Service and is available at any time to help members of pension schemes and beneficiaries with pensions questions.
You can contact MoneyHelper in different ways:
By phone: you can call them on 0800 011 3797 (Monday – Friday, 9am to 5pm)
By webchat: you can visit their online webchat for further help
By online form: you can complete their online form to ask a question
By letter: you can write to them at
MoneyHelper Pensions Guidance
Money and Pensions Service
120 Holborn
London
EC1N 2TD
Financial advice is tailored to you and your circumstances. An independent adviser will give unbiased and unrestricted advice and can consider products from a wide range of firms across the market that could meet your needs and objectives. It costs money, and it might not be the right option for everyone, but it can be a good investment.
A restricted adviser or firm is usually cheaper than an independent adviser but can only recommend certain products, product providers, or both.
An adviser will take everything into consideration – all your pension savings, your retirement plans and your options. They’ll work with you closely and advise on what they think is the best thing to do.
If you don’t have a financial adviser, MoneyHelper has guidance to help you find a financial adviser including a Retirement adviser directory.
As this is a new type of pension scheme in the UK you will need to think carefully about finding the right financial adviser who can help you understand what the impact of any decisions you make mean for you. It will take time for financial advisers to become ready to advise people on this type of pension scheme.
MoneyHelper is backed by the Government, and
all advisers listed are regulated by the Financial Conduct Authority (the FCA), the organisation that sets the UK’s financial rules, and
MoneyHelper don’t receive any incentive or commission.
Page last updated 1 May 2024