Is it worth putting AVC in?

[postiewhite]

I've been at RM for ten years. I have always paid the maximum percentage into the pension scheme. I'm currently 50yrs old and was thinking of maybe putting £50-60 a week in AVCs. I don't think I want to take anything out at 55 and just let it run until retirement age.
What's peoples take on that? Or is it better to put the £50-60 in a separate bank account at 3%?

[RobertT]

The benefit of tax relief and PSE, means a gross weekly payment of £50(the amount on your wage slip) into your pension, will only actually cost you £34.
I make that a 47% uplift on your money straight away.

A much better return than putting it in savings account!

[Simondavid]

Remember investments in pension payments avc carry risks you could potentially lose but normally longer term it makes sense

[RobertT]

Everything carries risk to some degree!

Even a cash savings account has an inflation risk attached to it. So if you're getting 3% on your money, but inflation is higher, your cash is going down in value.

[postiewhite]

I was thinking of £60 a week. I'm on a 35hr contract. I'm very rubbish with understanding pensions. Do I have a limit of what I can add in AVC? What's this PSE (pension salary exchange)? Does that affect me if I put in a certain limit of AVC's? I don't want to put too much in to be stung with something?!!

[robking]

I was thinking of £60 a week. I'm on a 35hr contract. I'm very rubbish with understanding pensions. Do I have a limit of what I can add in AVC? What's this PSE (pension salary exchange)? Does that affect me if I put in a certain limit of AVC's? I don't want to put too much in to be stung with something?!!

You can put in almost 100% of your earnings, up to £40,000 per year if you're paid that much, you will still have to pay National Insurance though and if you're already taking a pension a lower annual limit may apply.

[pumi63]

Hi all ,

I am also in a dilemma regarding AVC . Currently , it's Scottish Widows Money4Life plan where AVC are invested but i wondered , based on historic figures which are the best performing of the RMPP AVC to invest in ?

I understand that it is possible to lose money but putting something in is better than nothing . I think there is a choice of 6 funds to choose from like ethical , sharia , balanced , cautious , growth and i cant remember the other one .

Can anybody shed some advice please as it may help others that cannot decide , and there is no information that i can find on the web .

Thank you

[RobertT]

There's a stickie with a list if all the important websites regarding RM pensions. Including one for the AVC factsheets.

[Sputters]

Hi I pay £20 a week into an avc and have done for the past 15 years .would it be of any benefit for me to pay an additional £30 to make it £50 a week when I have only 3 years before retirement. Also which fund as there are about 5 would give me max return
Thanks for any advice

[RobertT]

Hi I pay £20 a week into an avc and have done for the past 15 years .would it be of any benefit for me to pay an additional £30 to make it £50 a week when I have only 3 years before retirement. Also which fund as there are about 5 would give me max return
Thanks for any advice

Generally speaking it's best to put in as much as possible, but without knowing more details, nobody can can give you specific advice.

Equally, nobody knows how the different funds will perform in the future. Its only possible to see how they've done in the past.

[Sputters]

Thanks Robert
I will pay more in and hope it goes ok. if nothing I will get tax relief on it

[Wullie10]

Hi all ,

I am also in a dilemma regarding AVC . Currently , it's Scottish Widows Money4Life plan where AVC are invested but i wondered , based on historic figures which are the best performing of the RMPP AVC to invest in ?

I understand that it is possible to lose money but putting something in is better than nothing . I think there is a choice of 6 funds to choose from like ethical , sharia , balanced , cautious , growth and i cant remember the other one .

Can anybody shed some advice please as it may help others that cannot decide , and there is no information that i can find on the web .

Thank you

Does anyone have a link for the latest Scottish Widows AVC fund prices ? There was a link sometime back but i can't find it now.

[RobertT]

Hi all ,

I am also in a dilemma regarding AVC . Currently , it's Scottish Widows Money4Life plan where AVC are invested but i wondered , based on historic figures which are the best performing of the RMPP AVC to invest in ?

I understand that it is possible to lose money but putting something in is better than nothing . I think there is a choice of 6 funds to choose from like ethical , sharia , balanced , cautious , growth and i cant remember the other one .

Can anybody shed some advice please as it may help others that cannot decide , and there is no information that i can find on the web .

Thank you

Does anyone have a link for the latest Scottish Widows AVC fund prices ? There was a link sometime back but i can't find it now.

See my post upthread. There's a stickie!

[pumi63]

Hi ,

I think you can change the percentage amount that you have invested in the funds in Money4Life within the Scottish Widows website .

At the moment , i am getting out less than what i put in but i cant find any recommendations anywhere on the web .

Does anyone invested in the Money4Life funds know which is or are the best ones to invest in out of the choice of 6 or 7 that appear on the Flexi-Plan ?

I am in RMPP Balanced , Cautious and Growth and split as 27 , 16 , 57 respectively .

Thanks

[RobertT]

It's not really a case of this fund is better than that fund, because it depends what the individual wants to get out of their investments.

The 2 main things to consider are age and attitude to risk.

A 25 year old might choose a more riskier fund due to them having longer to invest, and time on their hands to ride out the ups and downs along the way, and over time that should pay off.
But a 55 year old might take a more cautious approach, due to them nearing retirement and not wanting to risk what they've already got.

The 'guide to AVC's' is worth a read: https://www.royalmailpensionplan.co.uk/ ... sp_1_0.pdf

As I've already said twice in this thread, the performance data of the AVC funds is available via the 'pension websites' stickie.
But here's the link anyway: https://digital.feprecisionplus.com/cor ... ory=2rmp62

Ultimately it's up to you to use that information to make your choices based on your situation, or else consult an IFA for professional advice or perhaps a more knowledgeable friend or relative.
Always bearing in mind that past performance doesn't always correlate to future performance.

Also remember that all RM pension contributions benefit from tax relief and salary sacrifice(PSE), which means each £1 gross(the amount on your wage slip) is only actually costing you 68p. Your income tax and NIC's are being reduced accordingly and the taxman pays the other 32p.