What can I do with my fAVC

Peony26

At the age of 30(I am now 50), a financial advisor suggested I take out a free standing AVC- I took this advice hoping to use the funds to retire at 55. I have come to realise that my knowledge of fAVCs was far from good and that its worth in today's terms is insignificant! I work for the NHS and have contributed to the superannuation scheme for nearly 30 years.
I would like to know if, with the new pensions rules, I can transfer the funds in my fAVC to my NHS pension? If not, would I be able to receive a cash lump when the fAVC matures rather than having the £600 a year it is worth? Finally, should I have been advised to pay into an AVC that would run alongside my work pension?
Many thanks

Your_Hero

Peony26 wrote: »

I would like to know if, with the new pensions rules, I can transfer the funds in my fAVC to my NHS pension?

Transferring pensions in has to be done within 12 months of being a member. This applies for both the 1995 and 2008 section of the scheme.
http://www.nhsbsa.nhs.uk/Pensions/2658.aspx

If not, would I be able to receive a cash lump when the fAVC matures rather than having the £600 a year it is worth? Finally, should I have been advised to pay into an AVC that would run alongside my work pension?
Many thanks

If the value of the pot is less than £10,000 then you can claim under 'small pots' rules and take out as a lump sum. But this is only possible from age 60 (rules may have changed by then).

Alternatively, from age 55, there is the new pension freedom from next April which should theoretically allow you to do this under income drawdown though the cost of doing this is unclear for such a small pot.

kidmugsy

See p13
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/332714/pensions_response_online.pdf

dunstonh

I have come to realise that my knowledge of fAVCs was far from good and that its worth in today's terms is insignificant

They are only worth whatever you pay into them.

I would like to know if, with the new pensions rules, I can transfer the funds in my fAVC to my NHS pension?

no. Has to be within 12 months of joining.

Finally, should I have been advised to pay into an AVC that would run alongside my work pension?

The fact you wanted to take the personal pension prior to scheme retirement age suggests you were correctly advised (as an AVC could not be taken earlier than the main scheme age). So, the in-house option would not have met your objective.

Peony26

Many thanks for you advice - I was informed that I could take a lump sum when I took out the fAVC but I have subsequently been informed that I can't.
I thought I was acting to secure an early retirement by paying £60/month since the age of 30.Never mind, at least I now know that I was correctly advised at the time.
Thank again.

dunstonh

I was informed that I could take a lump sum when I took out the fAVC but I have subsequently been informed that I can't.

The ability to draw a lump sum from an FSAVC did not exist until 2006. So, you were told incorrectly at the time. However, by luck you now can as FSAVCs were abolished in 2006 and automatically became personal pensions.

I thought I was acting to secure an early retirement by paying £60/month since the age of 30.Never mind, at least I now know that I was correctly advised at the time.

£60 at 30 as a top to the main scheme was good. However, it should been increased to maintain a real terms value. That is where many go wrong and end up with less than expected. Based on what you have said, I would not say you were correctly advised (lump sum for example) but by fluke, the end result has matched what you were told.

PeacefulWaters

Peony26 wrote: »

I thought I was acting to secure an early retirement by paying £60/month since the age of 30.

A lesson to learn for everybody here. Increase your contributions every time your pay goes up. Without fail.