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AVCs

16 Nov 2017, 19:39

Hi there,first time on here...wondered if anyone has got or had Avc’s with Royal Mail? I’ve heard conflicting reports about what you can & cant do with them.I’m thinking about cashing mine next year...any help/advice would be welcome..thanks


AVC’s

16 Nov 2017, 22:09

261184 wrote:Hi there,first time on here...wondered if anyone has got or had Avc’s with Royal Mail? I’ve heard conflicting reports about what you can & cant do with them.I’m thinking about cashing mine next year...any help/advice would be welcome..thanks


From my own point of view, my AVC investments will enable me to maximize my forthcoming pension from RM without the need to turn any of said pension into a tax-free lump sum. I'm glad I had the sense to put money into AVCs for quite a long time.

Are you retiring next next?

AVC’s

17 Nov 2017, 04:48

261184 wrote:Hi there,first time on here...wondered if anyone has got or had Avc’s with Royal Mail? I’ve heard conflicting reports about what you can & cant do with them.I’m thinking about cashing mine next year...any help/advice would be welcome..thanks

The usual use of AVC’s is to fund the tax free lump sum when taking your main pension benefits, which is particularly useful for Section C members because they don’t get one as standard.

It is also possible to transfer out and into a personal pension, or if you’re over 55 you can access the money under ‘pension flexibility’. But both would mean that more of your AVC pot is likely to be taxable.

There’s lots of info on AVC’s here: https://www.royalmailpensionplan.co.uk/ ... nsion-avcs

AVC’s

20 Nov 2017, 18:46

BeamishStout wrote:
261184 wrote:Hi there,first time on here...wondered if anyone has got or had Avc’s with Royal Mail? I’ve heard conflicting reports about what you can & cant do with them.I’m thinking about cashing mine next year...any help/advice would be welcome..thanks


From my own point of view, my AVC investments will enable me to maximize my forthcoming pension from RM without the need to turn any of said pension into a tax-free lump sum. I'm glad I had the sense to put money into AVCs for quite a long time.

Are you retiring next next?

Thanks for replying...appreciated

AVC’s

20 Nov 2017, 18:52

261184 wrote:
BeamishStout wrote:
261184 wrote:Hi there,first time on here...wondered if anyone has got or had Avc’s with Royal Mail? I’ve heard conflicting reports about what you can & cant do with them.I’m thinking about cashing mine next year...any help/advice would be welcome..thanks


From my own point of view, my AVC investments will enable me to maximize my forthcoming pension from RM without the need to turn any of said pension into a tax-free lump sum. I'm glad I had the sense to put money into AVCs for quite a long time.

Are you retiring next next?

Thanks for replying...appreciated

I've done 33 yrs as u can tell by my login...my biggest frustration was my quote in Sept on where my pension is £6,300 a year!! The lump sum was Ok... I was 56 in Sept, I've got a reasonable chunk in my AVC but wondered what difference it would make to my yearly pension if I used my AVC money eventually for my lump sum...I've probably got another year to do to top the AVC up to amount I'd be happy with

AVCs

21 Nov 2017, 05:46

With 33 years’ service, you’re in Section B of the RMPP and get a lump sum as standard. So you will have 3 choices with your AVC funds:

1. Use your AVC’s along with the standard lump sum, to fund the maximum 25% lump sum allowable.
2. Give up some or all of your standard lump sum in return for a higher guaranteed pension, with the AVC's making up the rest of the lump sum.
3. Use your AVC’s as a separate pot and buy an annuity or draw it down.

To work out roughly what the total value of your RM pension benefits are, use this formula:

Yearly pension x 20 + standard lump sum(section B) + AVC’s = total value

Then simply divide by 4 to get the maximum 25% tax free lump sum that’s allowable.
But don’t forget to factor in the 5% per year reductions for taking your pension/s before the normal retirement ages of 60 and 65.

AVCs

29 Nov 2017, 13:48

RobertT wrote:With 33 years’ service, you’re in Section B of the RMPP and get a lump sum as standard. So you will have 3 choices with your AVC funds:

1. Use your AVC’s along with the standard lump sum, to fund the maximum 25% lump sum allowable.
2. Give up some or all of your standard lump sum in return for a higher guaranteed pension, with the AVC's making up the rest of the lump sum.
3. Use your AVC’s as a separate pot and buy an annuity or draw it down.

To work out roughly what the total value of your RM pension benefits are, use this formula:

Yearly pension x 20 + standard lump sum(section B) + AVC’s = total value

Then simply divide by 4 to get the maximum 25% tax free lump sum that’s allowable.
But don’t forget to factor in the 5% per year reductions for taking your pension/s before the normal retirement ages of 60 and 65.
Thank you RobertT..appreciated very much

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