AVC pension lump sums and annuity question

sussexlad2009

Hi money experts.

Two questions if I may.

1) I work for the railway and have been putting as much as I can into my AVC (Brass) to build up my retirement lump sum.
I was told today that this government is going to be able to tax at 40% anything over 30K. Is that true?


2) When I lost my wife back in 2009 her pension that was with Sun Life was converted into an annuity that pays me around £40 a month.
With the new laws coming in will I have options to use?

Many thanks

xylophone

I don't understand the reference to £30,000 in connection with a pension - are you confusing it with redundancy?

With regard to the annuity payment from your wife's pension, there is no change at the moment but may be in the future?

https://forums.moneysavingexpert.com/discussion/5198321

sussexlad2009

xylophone wrote: »

I don't understand the reference to £30,000 in connection with a pension - are you confusing it with redundancy?

With regard to the annuity payment from your wife's pension, there is no change at the moment but may be in the future?

https://forums.moneysavingexpert.com/discussion/5198321

Hi, ok re the annuity.

My pension and AVC are kind of linked, The AVC allows me to increase my tax free lump sum or have a slightly better pension.
The 30K came from a work mate who said we would be hammered after 30K of lump sum

xylophone

As I understand it, your BRASS contributions are available to you when you draw your Scheme Pension.

The Scheme provides a lump sum and a pension.

You can choose to take a reduced lump sum and increased pension.

You can choose to take some or all of your lump sum from BRASS so as to have a higher pension.

I suggest you try here https://www.railwayspensions.co.uk/Resources/Client/PML.RailwayPensions/Templates/Folder.aspx?DocID=2727&

for accurate information about your personal circumstances.

kidmugsy

sussexlad2009 wrote: »

The AVC allows me to increase my tax free lump sum or have a slightly better pension.
The 30K came from a work mate who said we would be hammered after 30K of lump sum

There has been speculation that Labour might introduce such a policy. If so, I confidently predict you won't see it in their manifesto.

Mind you, I suspect that 40% isn't right: probably you'd have to treat the excess over £30k as ordinary taxable income, so the rate you'd pay would depend on your income in the relevant tax year.

If there are big enough financial problems in the next few years, it might not be only Labour who eye pension money as an easy mark.