Left over AVC in DB sceme

Rob749

I have a small DB pension which i will be taking next year, at the moment I am saving in AVCs in that scheme with my employer. The tax free lump sum I will be able to take is 25% of the total of my pension pot plus the AVCs I have saved. as the lump sum is taken from the AVCs first, I have estimated, and had it confirmed, that I will have approximately £3500 excess balance left in the AVC fund after the lump sum is taken, and then I will draw the full pension as a defined benefit under the scheme.

I plan to then transfer the excess balance into a SIPP with HL. Under current rules I will be able to do this, but my current tax free lump sum I can take will be reduced by 25% of the excess AVC balance, unless I purchase an immediate annuity with an external provider. (Not viable really).

My question is, how will this amount be treated in the SIPP, can I take drawdown, UFPLS etc? This may be a stupid question, but can I still take tax free lump sums from this, or do I just draw on it, and pay tax at my basic rate? I know the AVC money is treated as defined contribution, if that makes a difference. Can anyone please advise? Thanks.

greenglide

Will the DB scheme not pay the excess as a UFPLS?

Mine did, even though it was not an option in the scheme booklet.

You could always ask them? There is no great reason stopping them from doing this!