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  • EdInvestor
    • #2
    • 23rd Aug 08, 2:46 PM
    • #2
    • 23rd Aug 08, 2:46 PM
    You can't usually take AVCs separately from the pension scheme they are attached to. Have your taken benefits from that scheme yet?Or is the AVC actually an FSAVC, a slightly different beast which behaves more like a personal pension?

    If so, then a sensible thing might be to take the 25% tax free cash out but leave the rest invested for later. This is called 'income drawdown' (but without at this stage taking any income.)To do that, most people move the money to a SIPP.

    Two popular low cost providers are www.h-l.co.uk and www.sippdeal.co.uk.
  • lvjlo01
    • #3
    • 23rd Aug 08, 6:08 PM
    • #3
    • 23rd Aug 08, 6:08 PM
    thanks for the reply. yes I think it's a freestanding avc. when I called for a quote to cash it I queried why,if there was £17000 in the pot I would only get £4000 and she said it was 25%.
    I'm also considering taking my BT pension. a colleague with same service as me was quoted £37500 + £3500pa
    • Francesanne
    • By Francesanne 23rd Aug 08, 6:28 PM
    • 1,957 Posts
    • 2,030 Thanks
    Francesanne
    • #4
    • 23rd Aug 08, 6:28 PM
    • #4
    • 23rd Aug 08, 6:28 PM
    I took my company pension at 55 and received a very nice tax free sum plus montly pension. Never regretted the decision.
    • jem16
    • By jem16 23rd Aug 08, 6:34 PM
    • 18,459 Posts
    • 11,272 Thanks
    jem16
    • #5
    • 23rd Aug 08, 6:34 PM
    • #5
    • 23rd Aug 08, 6:34 PM
    You can't usually take AVCs separately from the pension scheme they are attached to.
    Originally posted by EdInvestor
    Not necessarily so now after A-Day. AVCs from the Teachers' Pension scheme can be accessed anytime from 55-75 whereas NRD is 60. You can take the AVC even if you are still working.

    If so, then a sensible thing might be to take the 25% tax free cash out but leave the rest invested for later. This is called 'income drawdown' (but without at this stage taking any income.)To do that, most people move the money to a SIPP.
    You could also use a personal pension that allows drawdown.
    • dunstonh
    • By dunstonh 23rd Aug 08, 9:15 PM
    • 84,121 Posts
    • 49,103 Thanks
    dunstonh
    • #6
    • 23rd Aug 08, 9:15 PM
    • #6
    • 23rd Aug 08, 9:15 PM
    FSAVCs dont exist any more. They are now personal pensions and fall under personal pension rules.

    When you started the FSAVC, it would never have had a penny accessible as a lump sum. So, the move to 25% is a positive one.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
  • lvjlo01
    • #7
    • 24th Aug 08, 5:00 PM
    • #7
    • 24th Aug 08, 5:00 PM
    thanks all, looks like good advice. I'll be cashing in soon and investing the £4000. just got to choose where to save it.
    • cyclonebri1
    • By cyclonebri1 24th Aug 08, 5:27 PM
    • 12,438 Posts
    • 5,123 Thanks
    cyclonebri1
    • #8
    • 24th Aug 08, 5:27 PM
    • #8
    • 24th Aug 08, 5:27 PM
    I'm no expert, but from recent personnal experience;

    I had an AVC fund or rather a group AVC, attached to my company pension fund.

    When I took early retirement the value of the AVC was added to the value of the company pension value, and as a result of A day legislation i was entitled to 25% of the total as a cash lump sump, which coincidentally amouted almost exactly to the AVC amount
    • dunstonh
    • By dunstonh 24th Aug 08, 5:51 PM
    • 84,121 Posts
    • 49,103 Thanks
    dunstonh
    • #9
    • 24th Aug 08, 5:51 PM
    • #9
    • 24th Aug 08, 5:51 PM
    I'm no expert, but from recent personnal experience;

    I had an AVC fund or rather a group AVC, attached to my company pension fund.

    When I took early retirement the value of the AVC was added to the value of the company pension value, and as a result of A day legislation i was entitled to 25% of the total as a cash lump sump, which coincidentally amouted almost exactly to the AVC amount
    Originally posted by cyclonebri1
    That can happen with a minority of in-house AVCs. FSAVCS, or personal pensions as they now are, cannot do that.

    On the upside, there is no need to commence the benefits now and take the pension from a tax free status into a taxable one. It may need updating wtih some investment options that are more suitable for the needs of the OP but withdrawing the 25% may not be the best option.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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