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avc

01 Apr 2019, 08:52

Has anyone got experience of paying into AVC ? I did ask paygroup , though info seems to be conflicting from what i have read ,
I asked if I paid into avc's can one take out all the payments as one lump sum ? They said this was correct , but elsewhere I have read this is not the case ?
I wish to pay in lump sums over the next few years to take advantage of tax benefit .
thanks for any info in advance


avc

01 Apr 2019, 09:35

There are plenty of people on the pensions forums that pay AVC's, personally I've been paying them for about 25 years!

How you can take them will depend to some degree on which section of the RMPP you're in. If you're in sections A, B or C, they are normally used to fund some or all of the tax free lump sum when taking your main pension benefits.
Or they can be transferred out to another DC pension arrangement to buy an annuity or for drawdown, but only the first 25% is guaranteed to be tax free with the rest being classed as income.

If you're in section F, only the second option above applies.

Follow these links for more info on:

AVC's
Pension flexibility
General DC pension advice

AVC's are a great way of saving because of the tax breaks available, meaning with both tax relief and salary sacrifice(PSE), each £1 in gross contributions only costs £0.68, with the taxman funding the remaining £0.32.
Bonusplan also benefits from extra contributions from RM.

If you're paying in on a weekly basis then you get those benefits automatically via payroll, bearing in mind it's possible to pay in too much and fall out of PSE. There are threads about that on these forums!

I haven't paid in any lump sums for a number of years(before Zurich took them over) and so am unsure of the current procedure. But the last time I did it, I had to pay in the full gross amount by cheque upfront and got the tax relief refunded via my wages a few weeks later.
Whether that is still the case and whether PSE would also be factored in, I'm not sure. So I suggest you contact the PSC in Sheffield for advice, unless someone else on here has experience of it?

avc

04 Apr 2019, 18:51

When I was in the DC scheme I always played in avc,, but It stopped when I transferred into the new dbcbs(or whatever its called) can I pay avc's into this and how ?

avc

04 Apr 2019, 19:25

spen wrote:When I was in the DC scheme I always played in avc,, but It stopped when I transferred into the new dbcbs(or whatever its called) can I pay avc's into this and how ?

You can't pay extra into the DBCBS but you can pay into Bonusplan and Flexiplan.

Details here.

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