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<div><p>If you’re expecting a new child into the family, it’s an exciting and busy time, so it’s easy to ignore your pension.&nbsp; But it’s important to know what you’re entitled to, and how your leave might affect your pension arrangements.</p><p><span style="background-color: initial; font-size: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"><strong>Maternity Leave</strong></span><br></p></div><div>You are entitled to Statutory Maternity Pay if you:</div><div>• have worked for your employer for 26 weeks when you reach the 15th week before your due date, and&nbsp;</div><div>• earn at least £120 per week.</div><div><br></div><div>You’ll be entitled to 52 weeks off and receive Statutory Maternity Pay for 39 weeks. For the first six weeks, you’ll get 90% of your average weekly earnings. For the next 33 weeks, you receive 90% of your weekly earnings, or £151.20 a week, whichever is lowest.&nbsp; The remaining 13 weeks are unpaid.&nbsp;</div><div><br></div><div>The earliest your paid maternity leave can start is the 11th week before your baby is due. If your baby is born early, your leave starts the day after the birth.</div><div><br></div><div>You don’t have to take the 52 weeks you’re entitled to, but you must take at least two weeks off work following the birth.</div><div><br></div><div><p><strong>Paternity Leave</strong></p><p><span style="background-color: initial; font-size: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">Under the same rules as Statutory Maternity Pay, you are entitled to two weeks’ Statutory Paternity Pay. The weekly rate is £151.20 or 90% of your average weekly earnings, whichever is lower.</span><br></p></div><div><p><span style="background-color: initial; font-size: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"><strong>Adoption Leave</strong></span></p><p><span style="background-color: initial; font-size: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">If you’re adopting or having a child through surrogacy, you’re usually entitled to paid time off work. This is subject to the same rules and requirements (as above) for Maternity Pay and the pay structure is identical.&nbsp;</span><br></p></div><div><p>If you’re adopting as a couple, only one person can get adoption leave. The other might be able to get paternity leave or shared parental leave.</p><p><span style="background-color: initial; font-size: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"><strong>Shared Parental Leave&nbsp;</strong></span><br></p></div><div>Alternatively, you and your partner may be able to get Shared Parental Leave and Statutory Shared Parental Pay. You can share up to 50 weeks of leave and up to 37 weeks of pay between you.</div><div><br></div><div><p><strong>Your pension during family leave&nbsp;</strong></p><p><span style="background-color: initial; font-size: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">Your pension Scheme membership will be continuous while you are off, unless you have an agreement with your employer for this to be different.</span><br></p></div><div><span style="background-color: initial; font-size: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">Your pension contributions may change during family leave, because pension contributions are calculated using a percentage of your earnings.&nbsp;</span><br></div><div><br></div><div>If you don’t get any pay while on family leave, or if your pay reduces to nil, then your contributions will stop, but your employer may continue to pay them on your behalf. You may have to pay these back once you return to work.&nbsp;</div><div><br></div><div>While you’re on family leave, your pension benefits won’t be affected (as long as you haven’t opted out and contributions are paid) and your overall benefits will still be based on your final average pay.&nbsp;</div><div><br></div><div><p><strong>Additional Voluntary Contributions (AVCs)&nbsp;</strong></p><p><span style="background-color: initial; font-size: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">During your family leave, if you’re still earning enough to cover AVC contributions, then they will continue.&nbsp; But if you wish, you can change or stop these extra contributions while you’re receiving lower wages. You can easily do this if you log in to your myRPS account, go to the ‘My Pension’ section of your home page and click on ‘Funds’.&nbsp;</span><br></p></div><div><p><span style="background-color: initial; font-size: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto"><strong>Nominate your new family member&nbsp;</strong></span></p><p><span style="background-color: initial; font-size: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">Once your new child has joined you, make sure he or she is looked after in the event of your death.</span><br></p></div><div><span style="background-color: initial; font-size: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">Your child (or all your children), could benefit from a tax-free, lump sum of money if you die before your pension is taken.&nbsp;</span><br></div><div><br></div><div><p>This will depend on the benefits you have built up in your pension plan and is not a fixed amount, but it could be a substantial sum. And it won’t cost you a penny!&nbsp;</p><p><span style="background-color: initial; font-size: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">To make sure the money is paid in line with your wishes, it’s important to let us know where you would like this money to go. We then inform the Trustee.&nbsp;</span><br></p></div><div><p>If your circumstances change after you have completed your nomination, you can change your choice simply by updating your wishes in your online account.</p><p><span style="background-color: initial; font-size: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">The easiest way to nominate is by logging in to your online pension account at railwayspensions.co.uk. You’ll find the nominations page in the ‘My Pension’ section of your account.</span><br></p></div><div><p>Find out more in the Read as you Need 'Guide to family leave' <a href="/knowledge-hub/help-and-support/RAYN">here</a>.</p><p><span style="background-color: initial; font-size: inherit; font-family: inherit; text-align: inherit; text-transform: inherit; white-space: inherit; word-spacing: normal; caret-color: auto">You can also contact your employer directly or visit the Government website <a href="https://www.gov.uk/browse/childcare-parenting/pregnancy-birth" target="_blank" data-sf-ec-immutable="">here</a>, where you can find more details on support if you’re expecting a new baby.&nbsp;</span></p></div>

<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.&nbsp; If you’d like to find out more about the Trustee, go to <a href="/knowledge-hub/the-trustee">The Trustee</a>.&nbsp;</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>&nbsp;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. &nbsp;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.&nbsp; 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.&nbsp;</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>&nbsp;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>&nbsp;The&nbsp;<strong>Tapered Annual Allowance (TAA)</strong> is a lower AA.<strong>&nbsp;</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.&nbsp;<strong>&nbsp;</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.&nbsp; </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. &nbsp;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.&nbsp;</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.&nbsp; </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.&nbsp; 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&nbsp;<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://cdn3.railpen.com/mp-sitefinity-prod/docs/default-source/rayn/guides-of-iwdc-members/a-guide-to-dc-retirement-options-dc.pdf?sfvrsn=36c5518a_24">Read as you Need guide to retirement options</a>.&nbsp;</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.&nbsp; Go to Pensions and retirement at <a href="http://www.moneyhelper.org.uk/" data-sf-ec-immutable="">MoneyHelper</a>.&nbsp;&nbsp; </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: &quot;Open Sans Condensed&quot;, 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>.&nbsp; 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.&nbsp; 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.&nbsp;</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>&nbsp;</h4>

<div><span style="background-color: initial; font-size: inherit; text-align: inherit; text-transform: inherit; word-spacing: normal; caret-color: auto; white-space: inherit">Now you’re past your 20s, you’re probably more settled and have an idea of how you want to live, what matters most to you and what your priorities are for the foreseeable future.</span></div><div><br></div><div>In your 30s, you may have changed jobs and moved up the career ladder. You could also have a family to care for, childcare costs to pay, holidays to fund and many more financial demands to meet. Understandably, your money may feel stretched, and you may start looking for ways to cut back on your spending. Although a temporary pause on your pension payments may seem like a good way to give your bank account a breather, it’s important to think carefully before you make that decision.</div><div><br></div><div>Here’s why staying focused on your retirement goal and keeping up your saving journey, even during times of financial strain, could be one of the best things you can do for your future and your loved ones.</div><div>&nbsp;</div><h5>You’re not saving alone</h5><div>One of the most valuable benefits of saving for the future with the Railways Pension Scheme (RPS) is the fact that you’re not saving alone. Your employer puts money in too. If you’re a Defined Benefit member, your employer will pay in at least 60% of the money you put in (normally 1.5 times the contribution you make). For example, if you earn £25,000 a year and you pay in £3,000 towards your pension, your employer will top that amount up by £4,500 for free.</div><div><br></div><div>What’s more, you also get support from the government for saving into a workplace pension. This support comes in the form of tax relief on your pension contributions. The money you pay in is taken from your salary before you pay any tax on it, which helps you save more towards your pension.</div><div><br></div><div>So, for a basic-rate taxpayer, every £100 paid into a pension means the full £100 is invested for your future. If that money had been paid as salary instead, you would usually have received only £80 after tax. By saving into your pension, the £20 that would otherwise have been paid in tax is invested for you instead.</div><div><br></div><div>That’s why it’s important you think carefully before making any decisions about reducing or stopping your pension payments, as it could mean missing out on valuable money from your employer and tax relief.</div><div><br></div><div><a data-sf-ec-immutable="" href="https://www.railwayspensions.co.uk/knowledge-hub/news-and-views/blog/rps-blog/2023/04/26/tax-relief-and-tax-allowances-explained">Find out more about tax-free relief here.</a></div><div>&nbsp;</div><h5>Will your State Pension be enough to give you a good life in retirement?</h5><div>As much as we’d like to think of retirement as the golden time of our lives when for once we don’t have to worry about work and have the freedom to travel, take up new hobbies and enjoy life, we know that in reality the lifestyle we have in later life will largely depend on what income or savings we have.&nbsp;</div><div><br></div><div>If you are planning to rely heavily on the State Pension, will it give you the lifestyle you want at retirement? It’s a great supplement to your retirement income, but the current State Pension is around £12,500 a year. Will that be enough? For comparison, someone working 40 hours a week on the National Living Wage would earn around £26,400 a year, a difference of almost £14,000 a year. And, under current legislation, most people will not be able to claim their State Pension until their late 60s.</div><div><br></div><div>If we save towards our future while we are in work, we are much more likely to have the retirement we hope for.</div><div>&nbsp;</div><h5>Don’t interrupt the art of compounding</h5><div>Your pension is invested to give you an income when your working days are over. The longer you keep it invested, the more chance it has to grow. Sometimes, it may benefit not only from investment growth, but also from further growth on that growth. This process is known as compounding, and we explain it in more detail our <a href="/knowledge-hub/news-and-views/blogs/rps-blog/2026/10/19/pension-planning-your-20s---making-the-most-of-a-pension-plan-when-you're-young">‘Pension planning in your 20s’ article</a>.</div><div><br></div><div>Interrupting the investment process by stopping your pension payments would throw a massive spanner in the works. This is because it would affect the compounding that happens while you’re regularly investing into your pension. This on its turn means that you could potentially miss out on significant sums of money in the long run – after 20, 30 years.</div><div><br></div><div>The compounding effect only applies to members who have some or all of their pension money invested such as members of the Industry-Wide Defined Contribution (IWDC) section and members who pay in Additional Voluntary Contributions (AVCs) such as BRASS. Compounding has no impact on Defined Benefit (DB) only members but if you stop paying into your DB pension that will impact what you have to live on when your working days are over. What is more, you may not be able to re-join the DB section in the future.</div><div>&nbsp;</div><h5>Once you’ve stopped paying in, you may not start again</h5><div>Humans are creatures of habit and routine. It can be hard to go back to saving after you’ve had a flavour of having that extra bit of money in your pocket every month.</div><div><br></div><div>And as pointed above, if you leave the RPS, you may not be able to re-join again.</div><div><br></div><div>Think of your pension as one of your last options not your first when looking at where you can cut costs. To help our members think about their broader financial wellness we have introduced a simple planning tool called MoneyFit which you can access when you log into your <a data-sf-ec-immutable="" href="https://member.railwayspensions.co.uk/my-rps">myRPS account</a>.</div><div><br></div><div><a data-sf-ec-immutable="" href="https://www.moneyfit.co.uk/app/railpen">MoneyFit</a> is designed to give you some simple hints and tips to help you manage your money. It’s totally anonymous and takes around 5-10 minutes to use.</div><div>&nbsp;</div><h5>Have a plan! If you don’t have one, make one!</h5><div>By failing to prepare, you are preparing to fail as the saying goes. The same goes for retirement planning.</div><div><br></div><div>Even if you’re left with no other option but to cut back on your pension saving, this may not mean leaving the Scheme completely but pausing your Additional Voluntary Contributions (AVCs) for a little while.</div><div><br></div><div>So as an example, you may choose to pause your £50 monthly BRASS contributions for a while. This might be a good option for you if it means you can stay in the Scheme and can continue to save towards your pension. Or if you feel you have to leave pension saving behind for the time being, it’s always worth getting back to it when you’re more financially stable and can afford to save for later life.</div><div><br></div><div>The important thing is that you plan ahead, understand what you might need in retirement and ensure you are saving enough, without putting your broader financial wellness at risk.</div><div><br></div><div>Leaving the Scheme rather than pausing any extra payments you’re currently making could significantly impact your lifestyle in the future. It means you’ll have less to live on when your working days are over. For some, this also means they won’t be able to afford to retire when they want to and will be pushed to continue to work for longer.</div><div><br></div><div>To get an idea of how much income you might need to enjoy the lifestyle you hope for, give our <a data-sf-ec-immutable="" href="https://www.railwayspensions.co.uk/knowledge-hub/help-and-support/retirement-budgeting-calculator">Retirement Budgeting Calculator</a> a go. It’s a quick and easy tool to help you estimate if you’re saving enough for later life.</div><div><br></div>