Applying to take my IWDC pot

Find out what to do when you're ready to take your IWDC pot and what will happen next.

The application process

When you're ready to take your IWDC pension pot, also known as your Personal Retirement Account (PRA), there are a few key stages in the process. You can see a summary of these below. 

An application for my pension form, shown with an approved stamp on it
1. Starting your application

How you apply to take your IWDC pension pot depends on whether or not you're still paying into the Scheme. 

  • If you are still paying into the Scheme (an active member), you need to tell your employer that you want to take your IWDC pension pot and agree a retirement date with them. Your employer will then pass this information onto the Scheme administrator, Railpen. Your employer can only do this 3 months before the date you intend to retire. 
  • If you're no longer paying into your IWDC pot (a preserved member), then you don't have to contact your employer and can instead contact Railpen direct. Visit the get in touch page to find Railpen's contact details.

2. Completing the necessary paperwork

Once Railpen is aware of your plans to take your IWDC pension pot, we will send you Retirement Option Forms.  You must return these forms at least 1 month before your chosen retirement date to make sure they can be processed in time.

If you're taking annuity or drawdown, you will need to include the name and contact details for your chosen provider, please see the relevant section below for details.

If you want to make any changes to your investment funds, you will need to request these on the member website before returning your completed Retirement Option Forms. 

Find out how to change your investments on the managing my investments page.

Where possible, we will disinvest funds 28 days before the retirement date and hold the money as cash, ready to pay it. This is to protect the funds against market fluctuation in the weeks leading to the retirement and enables us to pay your benefits on your chosen retirement date. As such you will not be able to change your fund choices when there is less than 28 days to your retirement date, as funds may already be disinvested at this time.

3. Payments being made

Your final benefits will be calculated once the Scheme has received your final contributions. Benefits will then be paid to you or the scheme you have chosen to transfer to depending on your chosen option.

Retirement timeline

If you're still paying in, you can see all of the steps to applying for your pension in the retirement timeline for active IWDC members.  Download a copy below. 

Guidance on your transfer and retirement options

If you're aged 50 or over and ask to transfer out or take your IWDC pot, you may need to get free guidance on your retirement options from Pension Wise, or let us know that you're opting out of taking the guidance, before we can go ahead with your application. This is to help protect you from scams and make sure you understand your options.

When we receive your request to transfer or take your IWDC pot, we will write to you to let you know what you need to do.

You can find out more about Pension Wise on the MoneyHelper website.

If you choose to take your money a bit at at time (drawdown)

The Railways Pension Scheme does not currently offer a drawdown facility directly.

If you're considering this option, you will need to transfer your pension pot to another provider who provides drawdown options.

We partner with Legal and General Investment Management (LGIM)  to offer members access to its flagship product, the Retirement Income Multi Asset (RIMA) Fund. Visit LGIM's website now.  

You are still free to shop around with other drawdown providers. Compare drawdown options on the Moneyhelper website. 

You will need to contact your chosen provider directly to set up your drawdown policy. Once that's in place, you can return all of the necessary paperwork to Railpen.

Find out more on the understanding drawdown page. 

Two brown sacks, tied at the top, each with a pound sign on the front.

If you choose to buy an annuity
An open wallet, with several £20 notes poking out

The Railways Pension Scheme does not currently offer annuity options directly.

If you’re considering this option, you will need to transfer your pension pot to another provider who offers annuity options. It’s important to shop around to find the best options to suit the lifestyle you want in retirement. The income you will receive, the additional features and the fees you need to pay, can vary widely from provider to provider. There may also be different terms regarding eligibility. 

MoneyHelper offers an annuity comparison tool to help find the right provider for you. You can use that for free or you can speak to a financial adviser or annuity bureau to get them to search the marketplace for you.

Try MoneyHelper's annuity comparison.

Once that's in place, you can return all of the necessary paperwork to Railpen.

Find out more on the understanding annuities page. 

If you choose to take all the money in your pot as a cash lump sum (encashment)

Once you have completed and submitted your Retirement Options forms, the money from your IWDC pot will be paid directly into your bank account.

The timescale for receiving this payment may vary and you may want to hold off making any large purchases until the money is in your account.

If you are taking a cash lump sum, you should also be aware of scams. Fraudsters are known to target people in this situation by offering investment opportunities. And you could lose your entire savings.

Learn more about how you can protect yourself from on the scams page. 

Read more about encashment on the understanding encashment page. 

Three piles of £50 notes

Delaying taking your IWDC pot

If you decide not to take your IWDC pot once you reach your Pension Age or Target Retirement Age, you do not need to tell Railpen. Your membership will simply continue to run as normal until you are ready to begin the process outlined above.

However, your IWDC pot will remain invested, so it's important to keep an eye on how your funds are performing and consider whether low, medium, or high-risk funds are appropriate for you.

You will receive an annual benefit statement to help with this and can also keep track of your funds online, through your myRPS account. You can easily change your investment funds online at any time if you wish.

While your IWDC pot remains invested, and you remain working, you can continue making contributions, which means you will be an active member. You can even decide to make Additional Voluntary Contributions (AVCs) to boost your pension pot, if you can afford to pay more in.

If you decide not to continue to make contributions or you leave work you will become a preserved member. In this case, you would stop paying into your pension pot but can continue to manage your investments using your online account.

You must claim your IWDC pot in full by age 75.

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