Redundancy company avc or new sipp?

philng

I intend placing some of my due redundancy payment into my pension.

I have the option of making a payment into my co Avc before I leave and then draw this as a tax free lump sum at age 60 which is 9 years away. Happy to wait this long as have other investments.

Alternative is a new sipp which I know I can draw down in stages from age 55 to minimise tax.

Seems the first option is the best? Any opinions of pros and cons?

robin61

Increasing your lump sum by using your AVC and therefore not impacting your pension is a great option. Fingers crossed of course that the rules still allow you to do this tax free in 9 years time.
I guess having the money in a SIPP probably gives you more choice in terms of control over your investment and potentially you might be able to get at it tax free by drawing down up to your personal allowance each year once you reach 55. Depends how much you have in there really.

philng

That was one of my concerns they may change the tax rules . Would seem unfair when people have planned, for them to then change the rules say just prior to drawing down avc.

AlwaysLearnin

Does your AVC provider allow transfers out? That could provide options later if required

philng

Not sure but plan would be to draw full avc as lump sum tax free at 60.

AlwaysLearnin

Yes, but if you find out if you can transfer out if you wanted, then that could enable the flexibility to move the pot should circumstances changes in the mean time meaning you want to get at it earlier (per the alternative option in your OP)