Non tax payer avc or additional pension.

maxie014

My wife is a non tax payer with a local gov pension.
Is there any point her using the avc scheme which is with prudential?
Or she can make additional pension payments but is there any benefits through tax when she doesnt pay any?

xylophone

See https://forums.moneysavingexpert.com/discussion/4812263

See post 9.

http://www.cavendishonline.co.uk/pensions/stakeholder-and-personal-pensions/ might be worth a look.

greenglide

As a non taxpayer AVCs are usually a bad idea unless they are paid for out of income that has been subject to tax even if you don't pay tax (a net pay arrangement) and the tax relief given by the pension company.

A personal pension would always give you the tax relief irrespective of whether any tax has been paid. They would generally be more flexible as to when the money can be accessed as well.

Payments which increase to main pension (added years?) is different, does LGPS offer these?

maxie014

Thanks for the replies,she only makes about £800 a month part time hours,just thought me paying avc would push me into paying tax in retirement in 10 years time,and would maybe be better paying more into hers.
Just had a look on her pension site she can pay top ups for 10 years which work out at £114 a month per £1000 extra pension a year,although she will only be 59 by then.
Would this be worth it or would i be better doing a s&s isa for her or something similar?

jem16

maxie014 wrote: »

Just had a look on her pension site she can pay top ups for 10 years which work out at £114 a month per £1000 extra pension a year,although she will only be 59 by then.
Would this be worth it or would i be better doing a s&s isa for her or something similar?

Would your wife plan to work until the scheme's normal retirement age or would she like to retire earlier if possible?

If she would like to retire earlier then using a personal pension would allow more flexibility as she could use that pot to fund the earlier retirement and leave the LGPS until normal retirement age. Taking the LGPS early means a reduction including any additional pension bought.

maxie014

Shes not a 100% sure about retirement age yet,dont think she would want to go on to 67 though.

OldBeanz

Wife is in a similar position but she just pays tax so we have had to decrease her AVC this year with the increase in NI and personal allowance. Also because she took it out a couple of years ago it will be tax free by being her lump sum.
Her retirement date is 67 but we are putting money into a HL SIPP as well which is allowing that to come down to nearer a WASPI date of retirement. HL are, I believe, good value for pensions under £100k and their level of service is second to none.

dunstonh

HL are, I believe, good value for pensions under £100k and their level of service is second to none.

under 20k. Once you get over £20k then you can get pensions costing 0.4% all in. HL would be 0.45% plus fund charge still at that point.