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Maximum AVC payments after taking NRA 60

11 May 2018, 06:03

Is there a maximum payment you can make into your AVC after taking your NRA 60. i heard somewhere you could only pay in £4000 once you had started receiving your pension.

Many Thanks


Maximum AVC payments after taking NRA 60

13 May 2018, 07:48

The £4,000 per year contribution limit when you’ve already taken pension benefits, only applies to DC pensions.

So if you’re just taking your main DB NRA60 benefits, you can still pay in up to 100% of your gross earnings into your AVC’s and/or separate pensions. But remember to factor in RM contributions, tax relief and the pension input amount.

If you also take your AVC’s(Bonusplan & Flexiplan) with your NRA60, then the £4k limit will apply because they are DC pots. However it also depends on what you actually do with the money you withdraw. More info here.

Maximum AVC payments after taking NRA 60

13 May 2018, 07:56

Thanks Robert.

If I take my NRA 60 pensions without my AVCs will I lose any of my 25% tax free lump sum from my AVC

Will it effect the amount of tax I pay on my AVC in any way at all.

I am section C and don't intend to take any lump sum with my pension.

Many Thanks

Maximum AVC payments after taking NRA 60

13 May 2018, 08:19

Hawkey99 wrote:Thanks Robert.

If I take my NRA 60 pensions without my AVCs will I lose any of my 25% tax free lump sum from my AVC

Will it effect the amount of tax I pay on my AVC in any way at all.

If you don’t take your AVC’s with your NRA60 you still have the choice to take them with your NRA65. Alternatively, you could treat your AVC’s as a separate pot and take them independently of your RMPP benefits, but only 25% is guaranteed to be tax free, with the rest being treated as earned income and potentially taxed accordingly.

I am section C and don't intend to take any lump sum with my pension.

The best time to take your AVC’s is with your main RMPP benefits and probably the NRA60 for most people because that’s likely to be worth more. The whole point of AVC's to to use them to fund the tax free lump sum, so as to not have to commute any pension to get one - particularly useful for section C'ers. Therefore if you take them at any other time, tax is more likely to be payable, although as ever, that will depend on circumstances.

Maximum AVC payments after taking NRA 60

13 May 2018, 12:09

Thanks Robert.

So basically if I wanted to take some of my pension at 55, its take NRA 60 with AVC and get all/most of my AVC tax free or take it with NRA 65 but lose the 25% tax allowance associated with the value of the NRA 60 pension.

Is that right ?

Thanks

Maximum AVC payments after taking NRA 60

13 May 2018, 16:18

Yes.

If you don't use any of your AVC cash when taking your NRA60, then all of it will be 'attached' to your NRA65 instead, meaning a higher possibility of having to pay tax.

Also bear in mind you'll have your DBCBS pot aswell(assuming you opted for that), which is effectively another AVC.

Maximum AVC payments after taking NRA 60

13 May 2018, 19:32

Thank you Robert.

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