FSAVCs

edited 30 November -1 at 1:00AM in Pensions, Annuities & Retirement Planning
6 replies 1.2K views
nomoneyherenomoneyhere Forumite
2 Posts
Hi
Could someone help me please? I am 38 years old and have been employed by the Local Authority since I was 18. I was advised to and indeed have been paying FSAVCs since the start i.e. over 20 years now. I have recently been told that I should stop these payments as it is likely I will overpay. It was also suggested that I should complain as I shouldn't have been advised to do this from such a young age. Is this right? Many thanks.

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  • dunstonhdunstonh Forumite
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    I was advised to and indeed have been paying FSAVCs since the start i.e. over 20 years now. I have recently been told that I should stop these payments as it is likely I will overpay.

    Who told you that?

    Are you likely to have pension values of more than 1.6 million pounds at retirement?
    It was also suggested that I should complain as I shouldn't have been advised to do this from such a young age. Is this right?

    ROFL. The rubbish that people get told.

    No, its not right. Indeed, the earlier you start, the less you need to put aside each month and the more you get back in the end due to the longer investment term.

    If more people paid in from an early age, then there wouldnt be half the problems with underfunding retirement as there is now.

    No offence but the person feeding you information hasnt got a clue what they are talking about.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Hi thanks for your response. No, I will not have a pension value more than £1.6m. My LGPS currently allows me to receive 2/3 my final salary, so assuming 40 years membership, I will reach this ceiling, so of what use will my FSAVCs have?
  • dunstonhdunstonh Forumite
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    so of what use will my FSAVCs have?

    25% tax free cash with rest going into annuity purchase or drawdown to boost your income to get you a comfortable retirement.

    LGPS wont be 2/3rds. Its an 80ths scheme so 40/80ths = half. The FSAVC (which is technically a personal pension now as FSAVCs were made obsolete last year) will bridge the gap between full salary and half salary.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • ffacoffipawbffacoffipawb Forumite
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    Hi thanks for your response. No, I will not have a pension value more than £1.6m. My LGPS currently allows me to receive 2/3 my final salary, so assuming 40 years membership, I will reach this ceiling, so of what use will my FSAVCs have?

    The 2/3rds salary maximum has now been abolished. No reason why your pension can't significantly exceed your salary if you pay in enough!
  • dunstonh wrote: »
    LGPS wont be 2/3rds. Its an 80ths scheme so 40/80ths = half.

    Dunsonh, you are forgetting that the local gov superan is a 1/80 PLUS tax free cash.
    A 2/3 (40/60) scheme that paid tax free cash always used to offer a residual pension about 1/2 pension. Hence such statutory schemes are broadly equivalent to a 1/60 scheme.
  • dunstonhdunstonh Forumite
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    Dunsonh, you are forgetting that the local gov superan is a 1/80 PLUS tax free cash.

    No. I was just concerned that the OP was in the belief that he was on for 2/3rds income. Whereas it is half plus TFC.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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