Avc extra ?

geelamch

Hi all,
Just looking for some feedback for an option I have .

Self
49 years old , salary £44000 , final salary 2/3 scheme.
Pension estimate at 56 tfls £124000, £17000 pa ,or various options.
Wish to invest another £100 per week and do this through avc extra in railway scheme this can be taken as a separate entity from main scheme and used as a drawdown if desired.I like this because although there are better schemes the deductions are from source.
My wife is eight years younger than myself so I thought that an avc extra would perhaps help fund a few years transition till wife could access her pension
The reason for the extra cash to invest is a salary rise so might aswell get rid of it and avoid the nasty taxman lol.

jamesd

That looks like a good plan.

If you have a mortgage don't be keen on overpaying it. The extra money paid into the pension will do you more good, normally making more in investment gains than the interest cost. It's a nice way to help to improve the pot size to cover the gap years.

Livingthedream

Do you mean Brass2? as you have to max out Brass2 before you can start a AVC Extra scheme.

Brass2 will give you a larger tfls were as AVC extra would have normally been used to buy an annuity, but with the new pension rules I'm sure you can cash that in on retirement.

With your salary at £44000 and a presumed tax code of 1070L (personal tax allowance + Railway uniform allowance) and your pretax Railway pension payments there's a good chance your not a higher tax payer so you will only get 20% relief unless you work more Sundays than the Pope? :rotfl:

One question worth asking is, with 7 years to your projected retirement (56), would the Brass2 best be used funding higher risk stocks and shares or lower risk cash/bonds?

geelamch

Livingthedream wrote: »

Do you mean Brass2? as you have to max out Brass2 before you can start a AVC Extra scheme.

Brass2 will give you a larger tfls were as AVC extra would have normally been used to buy an annuity, but with the new pension rules I'm sure you can cash that in on retirement.

With your salary at £44000 and a presumed tax code of 1070L (personal tax allowance + Railway uniform allowance) and your pretax Railway pension payments there's a good chance your not a higher tax payer so you will only get 20% relief unless you work more Sundays than the Pope? :rotfl:

One question worth asking is, with 7 years to your projected retirement (56), would the Brass2 best be used funding higher risk stocks and shares or lower risk cash/bonds?

Hi, yes I have maxed out brass 2 . Just looking for another option to get out as soon as possible.
:T:T

Livingthedream

geelamch wrote: »

Hi, yes I have maxed out brass 2 . Just looking for another option to get out as soon as possible.
:T:T

I don't know what train company you work for, but it might be worth inquiring if they do a employee company share purchase scheme. I was a member of First's buy as you earn scheme, which purchased First shares before tax (40% relief on share price), you have to keep the share for 3 years for tax free status, but I tupe'd over to another company so was allowed to sell all my shares tax free.