Deferred IFA

dunstonh

The rules on money purchase occupational schemes without safeguarded benefits are just changing now. Prior to this, an AVC would be classed as an occupational pension and require a pension transfer specialist.

xylophone

The rules on money purchase occupational schemes without safeguarded benefits are just changing now. Prior to this, an AVC would be classed as an occupational pension and require a pension transfer specialist.

But there is only around £10,000 in the pot!

maximumgardener

If I am reading this right, OP has already crystallised this small pension (with Pru) & taken TFLS of £2500, balance is therefore £7500 to go into drawdown at appropriate time and DD rate (presumably to reduce tax or eliminate tax altogether) ?

perhaps DD at £500 to £1500 pa (0r a bit more....so as to stay inside tax allowance and pay no tax, .....maybe when he gets his SP??
should be pretty straightforward really?

xylophone

If I am reading this right, OP has already crystallised this small pension

I don't think so - it seems to me that he has taken cash from a SIPP and brought his deferred TPS into payment, leaving the AVC with the Pru.....

jem16

xylophone wrote: »

I don't think so - it seems to me that he has taken cash from a SIPP and brought his deferred TPS into payment, leaving the AVC with the Pru.....

That is correct.

Pru now offer the following options for access;

You can take up to 25% of your TAVC pot as tax free cash; the remaining 75% is taxable. From 6th April 2015, Teachers' AVC (TAVC) members can take advantage of the new 'freedom' flexibilities and will be able to:
•Fully withdraw the whole TAVC in one go, with 25% as a tax free lump sum and the rest as a taxable lump sum.
•Partially withdraw only part of the TAVC, leaving the remainder invested, again with the first 25% of each payment tax free and then the remaining 75% taxable. This option allows teachers to 'spread 'the number of years over which they access their TAVC fund.
•Opt for Flexi Access Drawdown or non-lifetime annuity, i.e. take up to 25% as a tax free lump sum and move the balance to a Flexi Access Drawdown plan outside of the TAVC, after which time teachers can drawdown a regular taxable income, defer taking it or buy an annuity product, including non-lifetime annuities, either immediately or at a later date.
•Opt for a Lifetime Annuity, i.e. take up to 25% as a tax free lump sum and use the rest to provide a guaranteed regular taxable income (as before).

I would probably suggest going for the 2nd option over 2/3 years where all of it could be accessed tax-free as his TPS is around £6k. It would save all the hassle of attempting to transfer it from the Pru.

orwen

xylophone wrote: »

You stated in an earlier thread that you had accessed your SIPP.

I made a drawdown last summer which gave me a £2K tax free lump sum. Without that I would have been fried. The drawdown was immediately frozen and has remained so ever since.

orwen

xylophone wrote: »

You stated in an earlier thread that you had accessed your SIPP.

[Orwen in 2015]: "Thanks & will reply more fully later. You might laugh but my biggest concern right now is to see that mum's little dog has enough to eat, that's why I drew down £2.5k from my SIPP."

The little dog developed a spot on her eye but the vet identified it as a condition diagnostic of kidney failure. With a special renal diet and regular medication she survived mum by several months then it was another sad farewell. I've lost both parents and two pet dogs over the space of two & a half years, it's a lot of thanks to MSE that I have been able to make it through to where I am now, pension provision was the last thing on my mind when I was caring for mum, & then everything happened so suddenly.

Will update on further progress.

Thanks again and to all.

orwen

xylophone wrote: »

You have obtained a state pension statement which shows that owing to the Contracted Out Deduction, your starting amount is less than a full new state pension; you intend to contact DWP about making voluntary Class 3 contributions up to your state pension age to address this.

I obtained an online state pension forecast 05.04.2016 . Just phoned the gov.uk pension helpline and they told me if the amount per week comes to £155 then that indicates 100% contributions. My forecast for age 66 gave £155.65pw, so the helpline said I didn't need to make more contributions.

Slightly uneasy about all of this because there have been so many changes going on with the state pension but it looks as if I do not need to top up mine?

Bit odd though, if the TPS opted out - why is there no NICS Class 3 shortfall?

Thanks

greenglide

The first question is how old are you now?

Does the forecast say the the amount accrued already is £155 or the amount you will accrue if you keep contributing until you reach SPa will by £155? If it is already £155 then any further contributions will not achieve anything.

You say you are / have been in TPS which was a contracted out scheme until 5/4/2016 when contracting out ends for everything. If you have had significant periods not contracting out, especially if you had relatively high earnings at the time, you could have accrued sufficient AP to get you to £155 or more as at 5/4/2016.

orwen

greenglide wrote: »

The first question is how old are you now?

I am 60

Does the forecast say the the amount accrued already is £155 or the amount you will accrue if you keep contributing until you reach SPa will by £155?

The forecast says "The earliest you can get your state pension is 2022 when you'll be 66, your estimate is £155.65 a week"

If it is already £155 then any further contributions will not achieve anything.

That's what they said over the phone - further contriburions wouldn't achieve anything.

You say you are / have been in TPS which was a contracted out scheme until 5/4/2016 when contracting out ends for everything. If you have had significant periods not contracting out, especially if you had relatively high earnings at the time, you could have accrued sufficient AP to get you to £155 or more as at 5/4/2016.

But 155 is the figure which already appears on my forecast.