AVCs or Savings ?

yerodretep

For higher rate tax payers is it best to pay AVCs to get back 25% of £ plus typical 3% Annuity per year or Keep Net income and pay the extra 20% Tax & extra NI and put that into savings?

Simple question?:rotfl:

Has anyone done the calculations?

atush

So, your AVC has a typical 3% annuity attached when elsewhere you can get 5,5%? Or are you talking 100 or 50% spousal pension?

Second, AVCs are best when you can use them to get your TFLS instead of commuting your index linked main pension. What is your scheme?

Also, you have left out other options like Sipps over 'savings' which can grow and beat inflation, plus still get 40% HRTax.

State your scheme and the AVC rules for a start, as not all AVCs are the same.

dunstonh

For higher rate tax payers is it best to pay AVCs to get back 25% of £ plus typical 3% Annuity per year

Not all AVCs have a pension commencement lump sum of 25%. Most people do not buy indexed annuities with their AVCs or money purchase pensions unless they are retiring early.


Why have you chosen savings and AVCs as the options? What about all the other options available? (albeit, some overlap, such as PPP).

We need to know if your AVC can pay the tax free cash instead of the main scheme as that is a very good option if your can.

Has anyone done the calculations?

Pretty much an adviser out there would. Shortfall calcs and option comparisons are part of the role.