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AVC self-management choices ..

06 Jun 2019, 18:02

Helo! I wonder if anyone might be able to offer thoughts on this. I've been with RM almost 3 years and recently moved onto the sun-kissed slopes of AVC, moving from 6% of my part-time earnings to 30%. I'm now looking at taking the full pension pot sum out of the default 10-year hows your father, into the more self-managed area.

I am aware of the charts and the fund fact sheets, what I am confused about is which funds are available to me.

Until today, I thought the funds on this page would be my AVC self-selected options: http://webfund6.financialexpress.net/cl ... eID=443712

But the lovely lady at Zurich today pointed me at this: http://webfund6.financialexpress.net/cl ... eID=261501

The fund fact sheets offer slightly different info, as well. Anyone got any thoughts?

AVC self-management choices ..

06 Jun 2019, 18:18

I did the same recently, started paying a decent amount into AVCs and moved everything out of the lifestyle option into "Inflation Linked Bonds" (one of the options in the 2nd link you provided).

The investment choice is, of course, down to your attitude to risk, number of years to retirement and any other provision you may have. I have some other pensions, one of which is primarily invested in shares so I have decided to focus my RM DC pension pot on more cautious option to provide overall balance (I have been with RM 2 years and aim to do 10 years service max, maybe less).

AVC self-management choices ..

06 Jun 2019, 18:53

south London postie wrote:Helo! I wonder if anyone might be able to offer thoughts on this. I've been with RM almost 3 years and recently moved onto the sun-kissed slopes of AVC, moving from 6% of my part-time earnings to 30%. I'm now looking at taking the full pension pot sum out of the default 10-year hows your father, into the more self-managed area.

I am aware of the charts and the fund fact sheets, what I am confused about is which funds are available to me.

Until today, I thought the funds on this page would be my AVC self-selected options: http://webfund6.financialexpress.net/cl ... eID=443712

But the lovely lady at Zurich today pointed me at this: http://webfund6.financialexpress.net/cl ... eID=261501

The fund fact sheets offer slightly different info, as well. Anyone got any thoughts?

You're in the DC scheme, so the funds in second link you provided are the ones you can invest your money into.
You can find out a little bit more about these funds here.

The first link is for those in the RMPP and wish to pay AVC's to enhance their tax free cash(the usual use) when taking their DB benefits.

AVC self-management choices ..

06 Jun 2019, 20:58

Robert, thanks for the information and that link. All prepped for the phone call tomorrow :)

itinerant, yep, no one to blame but ourselves now ... :crazy: I've left it all far too late so will likely treat it as a mid-career decision.

Will also ask Zurich about Flexiplan and Bonusplan as I got side-tracked with this.

AVC self-management choices ..

07 Jun 2019, 04:20

south London postie wrote:Robert, thanks for the information and that link. All prepped for the phone call tomorrow :)

No problem! :thumbup

Will also ask Zurich about Flexiplan and Bonusplan as I got side-tracked with this.

Flexiplan & Bonusplan are for RMPP members.
As a DC member all your contributions, including anything over the 6% standard amount, go into one pot via whichever fund/s you invest in.

AVC self-management choices ..

08 Jun 2019, 01:19

I have now *re-positioned* to my Bat Out of Hell Strategy :d'oh! :Boo hoo! Thanks again fr the pointers :thumbup

AVC self-management choices ..

20 Jun 2019, 15:17

Having settled into the wonderful world of self-harm, I'm sorry self-investment, I am now - just looking - at how feasible it might be to take money from my Zurich account and put in, for example, a regular stocks and shares ISA (I'm quite interested in dabbling in a small way beyond what is on offer via the RM fund options)

I guess the process involves a percentage that is tax free and then a percentage that isn't ...Is there maybe a pdf that could take me through the steps and costs?

AVC self-management choices ..

20 Jun 2019, 17:03

south London postie wrote:Having settled into the wonderful world of self-harm, I'm sorry self-investment, I am now - just looking - at how feasible it might be to take money from my Zurich account and put in, for example, a regular stocks and shares ISA (I'm quite interested in dabbling in a small way beyond what is on offer via the RM fund options)

I guess the process involves a percentage that is tax free and then a percentage that isn't ...Is there maybe a pdf that could take me through the steps and costs?

The pros of investing into pensions is that you get tax relief on your payments, meaning each £100 net payment from you benefits from another £25 from the taxman. And if you pay into RM pensions(both DB & DC) you not only get tax relief but also salary sacrifice(PSE), meaning each £100 net payment gets you another £47.
And you want to give a chunk of that free money back as soon as you've got it?
Sorry, but I think that's mad!

Whether you can keep taking money out of your RM DC pension to put into an ISA(or anywhere else for that matter) is a question I don't know the answer to I'm afraid. But if you can, you'll need to be at least aged 55 and be willing to pay tax on 75% of it.

However, you may be able to transfer it to another pension arrangement such as a SIPP, which depending on the platform you go for, the investment choices are likely to be very similar to a S&S ISA. Contact Zurich for clarification.

If that isn't an option, why not put in as much into your RM pension to take advantage of tax relief and PSE, that's a big uplift on your money before any investment growth! With anything over going into a SIPP.

Depending on the platform you go for, the investment choices with an S&S ISA and a SIPP are likely to be very similar. But from a tax point of view, a SIPP is the better option going in as long as you don't get hit on the way out, which will involve planning on your part.

AVC self-management choices ..

20 Jun 2019, 18:23

Thanks Robert - brilliant information :Very Happy

I understand initial payments into the scheme are highly incentivised, was curious to know what could happen after that. I'm sure you're right; it's best to concentrate on the substantial gains just from being in the scheme, esp. if you take advantage of AVC!

Thanks again :)

AVC self-management choices ..

20 Jun 2019, 20:30

Just moved some money from RM Growth into RM Shariah.

Reason being Shairah have nearly 70% of holding in USA and in election year old Trump will want his economy to do well.

Any thoughts?

AVC self-management choices ..

20 Jun 2019, 20:37

In my heart I know there's no point in two postmen talking about the world economy but I will say one thing; once Brexit is sorted (one way or the other) the £pound will recover, so funds held in £pounds will, at some point, get a decent bounce vs. funds held in $US dollars (pretty sure those are the only choices we have).

I'm looking at that as a safety net in a way; whatever else I do to mess up, at least the £pound bouncing back should mitigate some of my self-inflicted damage .. and assuming Brexit does get sorted !!

On the Sharia Fund - great growth. There is talk of breaking up some tech giants, who really knows ..

AVC self-management choices ..

20 Jun 2019, 20:59

Become a director in RM lot's of cheep driven down shares with tax exemptions but only 20 people can get them?

AVC self-management choices ..

25 Jun 2019, 22:00

RobertT wrote:
south London postie wrote:Having settled into the wonderful world of self-harm, I'm sorry self-investment, I am now - just looking - at how feasible it might be to take money from my Zurich account and put in, for example, a regular stocks and shares ISA (I'm quite interested in dabbling in a small way beyond what is on offer via the RM fund options)

I guess the process involves a percentage that is tax free and then a percentage that isn't ...Is there maybe a pdf that could take me through the steps and costs?

The pros of investing into pensions is that you get tax relief on your payments, meaning each £100 net payment from you benefits from another £25 from the taxman. And if you pay into RM pensions(both DB & DC) you not only get tax relief but also salary sacrifice(PSE), meaning each £100 net payment gets you another £47.
And you want to give a chunk of that free money back as soon as you've got it?
Sorry, but I think that's mad!

Whether you can keep taking money out of your RM DC pension to put into an ISA(or anywhere else for that matter) is a question I don't know the answer to I'm afraid. But if you can, you'll need to be at least aged 55 and be willing to pay tax on 75% of it.

However, you may be able to transfer it to another pension arrangement such as a SIPP, which depending on the platform you go for, the investment choices are likely to be very similar to a S&S ISA. Contact Zurich for clarification.

If that isn't an option, why not put in as much into your RM pension to take advantage of tax relief and PSE, that's a big uplift on your money before any investment growth! With anything over going into a SIPP.

Depending on the platform you go for, the investment choices with an S&S ISA and a SIPP are likely to be very similar. But from a tax point of view, a SIPP is the better option going in as long as you don't get hit on the way out, which will involve planning on your part.


You definitely cannot transfer money held within a pension, to a S & S ISA. A transfer can only take place from one pension to another. I am paying AVCs towards my RM pension. I started late, so I am making up for lost time. As I am single, I am also paying into a S & S ISA. This will give me greater flexibility further down the line. I'm a section C member of the scheme, so don't get the greater benefit that section B provides. However, with my circumstances, I am able to create a more flexible pension that suits my needs.

AVC self-management choices ..

25 Jun 2019, 23:19

heapsy wrote:You definitely cannot transfer money held within a pension, to a S & S ISA. A transfer can only take place from one pension to another. I am paying AVCs towards my RM pension. I started late, so I am making up for lost time. As I am single, I am also paying into a S & S ISA. This will give me greater flexibility further down the line. I'm a section C member of the scheme, so don't get the greater benefit that section B provides. However, with my circumstances, I am able to create a more flexible pension that suits my needs.

Very interesting. We have a few things in common. Love the flexibility but .. the money you put in your stocks and shares ISA, is that from your net pay (so after NI and income tax)?

AVC self-management choices ..

26 Jun 2019, 00:00

south London postie wrote:
heapsy wrote:You definitely cannot transfer money held within a pension, to a S & S ISA. A transfer can only take place from one pension to another. I am paying AVCs towards my RM pension. I started late, so I am making up for lost time. As I am single, I am also paying into a S & S ISA. This will give me greater flexibility further down the line. I'm a section C member of the scheme, so don't get the greater benefit that section B provides. However, with my circumstances, I am able to create a more flexible pension that suits my needs.

Very interesting. We have a few things in common. Love the flexibility but .. the money you put in your stocks and shares ISA, is that from your net pay (so after NI and income tax)?


Yes. You don't get tax relief with ISAs on the way in. You get it tax free when you sell, or take the income from your investments. Most of my funds are UP by double digit %. One was 44% up when I checked the other day.
22% up across the entire portfolio. think it is worth looking at. I have £40k in total so far. Think about this. If you were retiring tomorrow, what would you do with your lump sum, in a period of very low interest rates for cash deposits?
I am also looking at it as paying myself off. That is, providing extra funds when I've finally had enough. hopefully in 8 years time at 60. Around £45k in AVCs on top. If I get a pay off from RM as well, then I will be quids in. I'm in delivery, and I just can't see myself doing 40 + years tbh.

AVC self-management choices ..

26 Jun 2019, 18:26

If your under 40 get a Lifetime ISA, u can pay £4k in a year and the government will give u at 25% bonus.

AVC self-management choices ..

26 Jun 2019, 22:50

^^ A bit late for me but great info.

heapsy wrote:Yes. You don't get tax relief with ISAs on the way in. You get it tax free when you sell, or take the income from your investments. Most of my funds are UP by double digit %. One was 44% up when I checked the other day.
22% up across the entire portfolio. think it is worth looking at. I have £40k in total so far. Think about this. If you were retiring tomorrow, what would you do with your lump sum, in a period of very low interest rates for cash deposits?
I am also looking at it as paying myself off. That is, providing extra funds when I've finally had enough. hopefully in 8 years time at 60. Around £45k in AVCs on top. If I get a pay off from RM as well, then I will be quids in. I'm in delivery, and I just can't see myself doing 40 + years tbh.

Interesting. Thing for me is (a) I find it difficult to even begin to compare and (b) they so heavily incentivise the AVG thing it's difficult to not participate.

Having said that, I love the greater options available outside the scheme so if fate sorts me out with a little extra, this looks like the way to go. THanks :Very Happy

AVC self-management choices ..

26 Jun 2019, 23:28

south London postie wrote:^^ A bit late for me but great info.

heapsy wrote:Yes. You don't get tax relief with ISAs on the way in. You get it tax free when you sell, or take the income from your investments. Most of my funds are UP by double digit %. One was 44% up when I checked the other day.
22% up across the entire portfolio. think it is worth looking at. I have £40k in total so far. Think about this. If you were retiring tomorrow, what would you do with your lump sum, in a period of very low interest rates for cash deposits?
I am also looking at it as paying myself off. That is, providing extra funds when I've finally had enough. hopefully in 8 years time at 60. Around £45k in AVCs on top. If I get a pay off from RM as well, then I will be quids in. I'm in delivery, and I just can't see myself doing 40 + years tbh.

Interesting. Thing for me is (a) I find it difficult to even begin to compare and (b) they so heavily incentivise the AVG thing it's difficult to not participate.

Having said that, I love the greater options available outside the scheme so if fate sorts me out with a little extra, this looks like the way to go. THanks :Very Happy


Something else I forgot to mention. If you think of the £40k I have in my ISA. Imagine if that was £40k in a pension. Straight away you would only get £10k tax free. Then, using the standard formula of dividing by 20, the remaining £30k would give you a starting pension of only £1,500 per year, plus cost of living increases. It would take a while to get your £30k back. If ever. My theory is that as you get older you will have spent most if not all of your cash, by the time you are 75. Leaving the pension intact, adding AVCs, then an ISA, should give me enough, and help to avoid paying too much tax.

AVC self-management choices ..

27 Jun 2019, 04:44

From a tax point of view, personal pensions are by far the better route on the way in compared to ISA's, as long as you don't end up paying tax on it on the way out – which isn't inevitable!

Take the £40k heapsy mentioned. Let's say for ease of this example that you've had no investment growth on your money at all(highly unlikely I know).
The £40k in your ISA will have cost you £40k, while factoring in tax relief it will of only cost you £32k in a pension.

Let's say your NRA60 will pay out £7k at 60, and if that is your only income it means you've got £5,500 in left over personal tax allowance(based on current rate). Therefore you could take your 25% tax free cash from your pension(£10k) and drawdown £27,500 over the next 5 years, leaving the remainder for between 65 & 67 once you've taken your NRA65 and until the state pension kicks in.
Therefore you've taken the full £40k out tax free and it only cost you £32k(less including investment growth).

Having a larger amount in a personal pension could also enable you to retire before taking your RM benefits by using the same drawdown method, but obviously involves saving much more and/or from an younger age.

There is no 'standard formula' for working out annuity rates! A pot of £30k would give you a varying amount depending on your age and type of annuity you purchase(i.e single life/joint life/level/percentage escalation). They're based predominantly on interest rates, gilt yields and life expectancy.
The value of DB pensions are often worked out as a 20x multiple.

Personally I think the best way to go is:

1. Make the most of AVC's and the added benefit of PSE, ideally ending up with savings of no more than 25% of your total pot value. Any more could bring income tax into the equation.
2. Take advantage of any unused personal tax allowance you're likely to have in retirement to supplement your main RM pension benefits, as described above.
3. Use ISA's and other savings vehicles to supplement your income once you're personal tax allowance is used up.

In practice a lot will depend on personal circumstances which will obviously vary. But as both myself and heapsy have described – there is more than one way to skin a cat!

AVC self-management choices ..

27 Jun 2019, 20:29

Yes, but if you are single, there isn't much point in building up even more widows pension that will never be used. What I was trying to point out was the flexibility of the ISA. Especially as we have at least two different NRAs, and a third on the way.

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