SIPP v AVC

unimaginative_user_name

I'm asking a question on behalf of my husband. He has a DB non-contributory pension with the C of E but he has the option of paying AVCs if he wishes. He is now 47 and now in a position to increase his contributions. Under C of E rules he would probably not retire until 68. As far as I can work it out from the documentation he's received the C of E wouldn't increase their contributions to match but obviously he would get 20% tax relief.

My question is would it make more sense to take out a SIPP which would have the advantage of being accessible over a decade earlier and give him a better range of investments to choose from. It would also mean he could take his tax-free lump sum and put it towards retirement housing as we are currently in tied housing. Would it be better to pay into the db pension which if I've understood correctly would provide a guaranteed income? I'm sorry if this question is a bit basic and the answer might be along the lines of how long is a piece of string! I'll suggest my husband phones up his pension provider and get their opinion too but I'm sure that perspectives from people on here would also be valuable.

Thank you.

bigadaj

You probably won't get much opinion from the pension provider, they are too conscious of liabilities and regulatory issues.

Many people would say that avcs are now only worthwhile when they are combined with the main db scheme, it they allow you to take the avcs as a lump sum which means that you take more of the fund as income.

If not then a sipp might be better, though if only 20% tax relief then it's not as good as if he got higher rate tax relief. Isas offer more flexibility and are tax free on the way out, rather than the way in, and might be more flexible if you need to buy a house before retirement.

dunstonh

My question is would it make more sense to take out a SIPP which would have the advantage of being accessible over a decade earlier and give him a better range of investments to choose from.

Why SIPP?
A SIPP is a more advanced option aimed at the experienced investor wanting greater access to more advanced and/or specialist options. Generically, SIPPs are a more expensive option (caveats apply). Is your husband after that sort of thing?

Would it be better to pay into the db pension which if I've understood correctly would provide a guaranteed income?

That would require a cost/benefits analysis. impossible to say without knowing facts.

'll suggest my husband phones up his pension provider and get their opinion too but I'm sure that perspectives from people on here would also be valuable.

Providers are not able to offer opinions. That is the role of an adviser. Providers can only talk about factual things that they deal with. Not what others may or may not deal with.