Lump Sums to AVC Application Deadline

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[reedy]

Will we get tax relief on it?

[yellowbelly]

Will we get tax relief on it?

Should do, but not employer contributions as don't think it's done with AVC's. So it's a way of getting back some of the
tax that we're going to have to pay on it.

[RobertT]

Will we get tax relief on it?

You will get tax relief as all pension payments get that, as long as you don't save more into pensions in a year than you earn(up to a max of £40k).

But you won't get the benefit of salary sacrifice on that particular week, because paying your lump sum/s into your Flexiplan AVC will take you way over the PSE limit.

[heapsy]

If people are within PSE, it might be worth increasing their weekly payment to receive the salary sacrifice element.. They would also benefit from £ / $ cost averaging too.

[mrcurve]

you used to be able to top up your pension for any strike days, but this may not have the value with the current scheme

[claretandblue]

I don't have an avc, is it worth setting one up?

[yellowbelly]

You will get tax relief as all pension payments get that, as long as you don't save more into pensions in a year than you earn(up to a max of £40k).

But you won't get the benefit of salary sacrifice on that particular week, because paying your lump sum/s into your Flexiplan AVC will take you way over the PSE limit.

Robert, I bow to your knowledge on topics pension wise but won't the the salary sacrifice PSE eligiblity depend on how much of the
lump sum you decide to put into the AVC? e.g if you only put in £100 of the FT estimated £1400 that would qualify for PSE because the remaining 1300
less tax etc. would still keep you above the minimum wage (or whatever it's called nowadays).

[Paul1983]

I dont see the "2023 Lump Sums AVC" tile on my app, is there anywhere else I can do this?

[RobertT]

you used to be able to top up your pension for any strike days, but this may not have the value with the current scheme

If I remember correctly, you also had to pay RM's contribution.
I think the ability to do that stopped when the FS scheme closed?

[RobertT]

I don't have an avc, is it worth setting one up?

Paying more into your pension potentially gives you a better and perhaps earlier retirement.
More info on AVC's is here: https://www.royalmailpensionplan.co.uk/ ... -benefits/

[RobertT]

Robert, I bow to your knowledge on topics pension wise but won't the the salary sacrifice PSE eligiblity depend on how much of the
lump sum you decide to put into the AVC? e.g if you only put in £100 of the FT estimated £1400 that would qualify for PSE because the remaining 1300
less tax etc. would still keep you above the minimum wage (or whatever it's called nowadays).

I was referring more to putting the whole lump sum into AVC's.
But yes, if you pay an amount into AVC's to stay within the PSE limit, then you'll still benefit from it.

I don't think the lump sums will count towards your wages for PSE purposes, because that benefit is calculated using basic pay. Although I hope I'm wrong, as it would mean a nice extra bonus for you lot.

[derricksmyth]

On the tax relief question, if you put in £1000 of the lump some into a AVC, would you get £250 tax relief, ie 25%?

[freespeech]

On the tax relief question, if you put in £1000 of the lump some into a AVC, would you get £250 tax relief, ie 25%?

As I understand it to pay in £1000 would "cost" you £800. This is because it gets tax relief at your usual rate (so 20%). Not sure about the NI savings based on this "one off".

[reedy]

Iam going to top up my weekly avc paymebts to near the max pse and put the lump sum in a savings account then slowly withdraw the money to replace the extra weekly amount. That way i will get full pse, interest on the lump sum and also the payments being spread will hopefully even out buying the dips and highs and also the lump is still there for emergencies