How to release AVC pot.

MalcolmW_2

I have an AVC with the Prudential who don't offer Flexible Drawdown. Is there anyway I can release these funds?

kidmugsy

MalcolmW wrote: »

I have an AVC with the Prudential who don't offer Flexible Drawdown. Is there anyway I can release these funds?

Some AVCs can be transferred to a SIPP (for instance); some can't. It's my impression that it depends on the Pension Scheme to which these AVCs are related, rather than on the Pru's rules. So: ask the Pru. You could perhaps also ask Hargreaves Lansdown (for instance) whether they have any experience of accepting AVC transfers like yours.

Linton

It all depends....

The answers to the following questions are a starter...

1) How old are you
2) What do you mean by "release"?
3) What pension scheme is the AVC part of? Are you still paying in to it?
4) What is the AVC's value?

If the answer to (1) is less than 55 then in most circumstances you cant access it in any way.

rpc

It depends on the scheme rules.

In my scheme, it's a case of buying an annuity or transferring the whole pension out - including main scheme benefits.

MalcolmW_2

Thanks to all who have posted.
The answers to Linton's questions are

1) How old are you
64
2) What do you mean by "release"?
Gain ready access to rhe total fund

3) What pension scheme is the AVC part of? Are you still paying in to it?
Teachers AVC No
I have teachers pension of 26k
4) What is the AVC's value?
75k

Linton

MalcolmW wrote: »

Thanks to all who have posted.
The answers to Linton's questions are

1) How old are you
64
2) What do you mean by "release"?
Gain ready access to rhe total fund

3) What pension scheme is the AVC part of? Are you still paying in to it?
Teachers AVC No
I have teachers pension of 26k
4) What is the AVC's value?
75k

Some schemes allow the 25% Tax Free lump sum for the Final Salary part to be taken from the AVC which should give you what you want. Whether the teachers pension allows this I dont know - if it does its the best way.

The other option is to transfer the AVC to another pension (if the scheme rules allow this) which allows for Flexible Drawdown after paying you 25% tax free. This would allow you to take out as much as you want at any time. The major downside is that it is taxed as income and so if you took too much in any one year you would be liable to 40% tax. The flexible drawdown option could cost several hundred pound in fees. One small gotcha is that you can only take Flexible Drawdown in a tax year when you have more than £20K/year pension income (including state pension) in payment. So you would need to wait until your main pension has started and possibly the tax year after that.

xylophone

http://forums.moneysavingexpert.com/showthread.php?t=4832892
Discussed here?

http://www.hl.co.uk/news/articles/features/teachers-avc-pensions-how-to-get-a-higher-retirement-income might be of interest - HL offer a SIPP - you might wish to enquire?

jem16

Linton wrote: »

Some schemes allow the 25% Tax Free lump sum for the Final Salary part to be taken from the AVC which should give you what you want. Whether the teachers pension allows this I dont know - if it does its the best way.

The teachers' pension scheme doesn't allow this.

You should be able to transfer it though as it's entirely separate from the main scheme.

OldBeanz

Transfer to a HL SIPP. Ensure you can comply with the Flexible Drawdown requirements http://www.hmrc.gov.uk/manuals/rpsmmanual/rpsm09103600.htm
(Which you appear to do).
Take your 25% tax free then access as much as you can each year ensuring you do not go into the higher tax band. Any funds not required can be re-invested in a SIPP. This assumes you are single.
If you are married then you should consider the pension options for your wife. With half your pension and some of her own she may be able to use flexible drawdown from the same pension if she survives you.
If you have children and inheritance tax issues then you can give this pension money income or part thereof to your children without penalty.