avc pension mod

paultb

i am a civil servant and will have 42 years service at time of retirement i have been paying avcs for the past 11 years in addition to my civil service pension , am i best continuing with this or invest the money elsewhere , i pay £200 a month into my avc .
any advice welcome .

EdInvestor

What total income (main pension after tax free cash, plus avc,plus state pension) do you expect at retirement?

There are various tax bands and if you have too much taxable income (as opposed to tax free income) you can end up paying over the odds.Also, if you are married, has your spouse fully utilised her tax-free allowance?

dunstonh

From memory, I dont think the civil service AVC can be used in conjunction with the main scheme (but dont hold me to it).

In which case, use of an AVC is largely obsolete nowadays and the other options, of which there are many variables, can often be better.

swanny65

I am in similar circumstances to the OP, 40.5 years service at age 60 and paying AVC's to Standard Life for about 3 years. I had previously paid 11 years FSAVC's and transferred then to the "in house scheme provider" because of the effect of Norwich Union's charges on the overall investment performance.

As far as i am aware i can take my AVC benefits in line with the Civil Service scheme. However i pay a significantly lower amount than the OP and the OP may be considering early retirement with the AVC's topping up their reduced Civil Service pension.

dunstonh

As far as i am aware i can take my AVC benefits in line with the Civil Service scheme.

Are you saying that you the commutation of benefits from the main scheme can include the AVC and allow the lump sum to be taken from the AVC rather than the main scheme?

AVCs never used to be suitable for early retirement (pre A day). Some schemes can still insist on having the AVC linked to the main scheme.

Andy_L

dunstonh wrote: »

From memory, I dont think the civil service AVC can be used in conjunction with the main scheme (but dont hold me to it).

You're right, You can't do the take the lump sum purely from the AVC to avoid commutation gambit.
Although both Paul & Swanny are, almost certainaly, on the old 1/80ths, 3x lump sum scheme & so don't have much scope for extra lump sum anyway

dunstonh

Thanks Andy.

That means the use of an AVC in this case is largely putting your money in an inflexible and obsolete product. Stakeholder, personal pension, SIPP or ISA would be better.