AVC and new pension changes

warren222

I have an AVC which I have contributed to for 20 plus years it is now worth around £30,000 and when the new changes were announced I thought, GREAT I would be able to take small lump sums over the next few years. It would be better than an annuity and I could avoid the hit of paying 40% tax when added to my pension.
But no, Standard life tell me I cannot do this without closing the AVC and opening another and of course paying charges each time and I should talk to there advisor which will cost me £500 for the consultation.


Anyone have a similar story?

jem16

warren222 wrote: »

But no, Standard life tell me I cannot do this without closing the AVC and opening another and of course paying charges each time and I should talk to there advisor which will cost me £500 for the consultation.


Anyone have a similar story?

So why not simply transfer the pension to another provider? What charges are you referring to for moving?

You don't need to take advice to do this.

SeniorSam

Give Hargreaves Lansdowne a call. Transfer in at no cost and they would be able to advise you on the best way to deal with this.

greenglide

The first question should surely be "if you are paying into AVCs what is the main pension scheme?".

AVCs can be very useful when the main pension scheme, if it is defined benefit, allows the AVCs to be used to fund a tax free lump sum without causing a hit on the main pension.

Without knowing this we are unable to know the answer?

dunstonh

But no, Standard life tell me I cannot do this without closing the AVC and opening another

Which sounds normal. AVCs would not have offered income drawdown when they first became available 10 years ago and its not surprising that they do not offer it now. AVCs are not the same as retail consumer pensions.

AVCs can also have other benefits that retail consumer pensions do not have. (some allow 100% tax free cash to be taken from them rather than the main linked scheme for example).