Are AVC's Any Good? I want to put £100 per month in

AlwaysLearnin

Is that always clear cut? Surely AVC's might have the benefit of easier administration (i.e. deducted from salary, therefore no needing to claim back higher rate tax etc), possibly subsidised fees and/or potential salary sacrifice?

jem16

AlwaysLearnin wrote: »

Is that always clear cut? Surely AVC's might have the benefit of easier administration (i.e. deducted from salary, there no needing to claim back higher rate tax etc), possibly subsidised fees and/or potential salary sacrifice?

Salary Sacrifice would be beneficial for the NI saving.

Claiming back higher rate tax isn't an issue as a simple phone call to HMRC would sort that.

Many modern personal pensions have low fees with better choice of investment funds giving better potential but yes weigh up the options.

As the Op is only just into higher rate tax and is probably getting the benefit of that through normal contributions, a S&S ISA would be more useful between age 55 and 65 as you are not stuck to an annuity or drawdown that would probably not be enough.

AlwaysLearnin

Thanks.

Agree a mix of S&S ISA and pension (the latter particularily with income that would attract 40% tax) is the best route.

OP - make sure you read up before diving in to S&S ISA's though, as there are so many options, and people/companies happy to 'share' your money with you. Have a look over on the savings & investments board for ideas and recommendations for learning material. Monevator.com is a great site too.

ermine

I am in a company defined benefit scheme since the age of 20.

Question is, however, are you going to be working for this firm till you are 55?

I started work at my company at 28, having worked for a few other joints before then. I got so pis5ed off with working for them that I quit at 52. You are a lot younger and will face a much more volatile working environment. Just sayin...

GPR

I have had cash AVC with Standard Life and its important to decide which plan its done with as they have many plans: some are riskier investments due to shares they invest in.You might for instance decide on a plan they have which is called Pension managed cash or similar name whereby the idea is that its a more secure type of investment and not so expose to share fluctuation prices.Also check out very carefully that can take all as tax free lump sum.
Remember there will be no access to cash until you retire and start pension. If start pension early then will be actuarially reduced though probably the pension not the avc fund.
Tax free limits may change in the future but reaaly it a very good way to save as its the only way to earn money and never pay any tax on it. This is different even that cash ISA`S as you pay into it using taxed money and its only the interst that is tax free.
I dont work for Standard Life or work in a financial sector and all my comments here are solely my own thoughts and experiences.Good luck.
GPR