CONTRIBUTING MEMBERS

You can currently choose to retire at any time from age 55*, provided you have at least five years' service, but your pension and your lump sum will be reduced to take account of the fact that they are being paid early.

* Please note, the minimum retirement age is rising to 57 from April 2028. However, if your pensionable service in the Group commenced before 4 November 2021 you will retain a protected minimum retirement age of 55.

Your normal pension age is 63 if you joined the Scheme after 1 April 1988. If you joined before 1 April 1988 and were in continuous employment until 17 May 1990, your normal pension age is 60 with the right to carry on working.

If you carry on working after normal pension age, you will build up extra years of contributing service up to a maximum of 45 years.

If your normal pension age is 63, you will be required to pay contributions for the extra pensionable service you build up after age 63. If your normal pension age is 60, no further contributions are payable if you work after age 60, but you will still build up extra pensionable service.

The Lifetime Allowance is a limit placed on the value of benefits in registered pension schemes individuals can accumulate in their lifetime without incurring tax charges. It was £1,073,100 for the 2023/2024 tax year.

The Lifetime Allowance tax charge in respect of savings in excess of the Lifetime Allowance was removed from April 2023 (and taxed at marginal rate instead) and the Lifetime Allowance was abolished from 6 April 2024. HM Revenue & Customs (HMRC) has provided some clarification on how this will work and the industry is waiting for more guidance.

From 6 April 2024, the Lifetime Allowance will be replaced by two new allowances will be introduced:

• The Lump Sum Allowance (LSA)
  A cumulative maximum limit of £268,275 (i.e. 25% of the current LTA) on the tax-free part of the lump sum payable on retirement
• The Lump Sum and Death Benefits Allowance (LSDBA)
  A cumulative limit of £1,073,100 (i.e. the 2023/2024 LTA) on the tax-free elements of lump sums that can be paid in life and death, to or in respect of an individual.

The legislation needed to implement these new allowances is still being finalised and therefore subject to change. The Group website will be updated as soon as more is known.

If you are considering taking your benefits, particularly in the period that spans 6 April 2024, it is recommended that you read Railpen’s leaflet , ‘How the New Lump Sum Allowance Might Affect Your Retirement Options’, which is provided with your retirement quote, as to how the changes might affect your retirement options. You should also take advice from an FCA-authorised financial adviser to understand what the new allowances mean for you. You can find an FCA regulated adviser in your local area by visiting www.moneyhelper.org.uk/retirement-adviser-directory – please bear in mind you will need to pay for regulated advice.