Pension offer

markinsouthsea

I have a deferred pension with an old employer. Attached to it is an avc I paid into whilst employed there.

The value of the avc is now £15,200

They are offering me as part of my early retirement from October 31st, cash lump sum of £3637 with the remainder paying additional pension of £306 per year, alongside the dB pension I have accrued.

I am 57 years old single life option, 58 April next year and in good health.

Does this option seem a fair deal? The alternative is that I ask for a transfer of the avc to my Sipp, but I have been advised previously by hl that I would need to seek advice to do that as the value is over 10k despite the avc being a dc pension albeit linked to dB scheme.

My original and preferred option is to transfer it to my Sipp, however taking the cash sum plus the additional pension may work, I’m just unsure whether the pension value they have given me is a good deal or not.

kidmugsy

You could always ask AJBell whether they could accept it without your taking advice.

James145

It's such a small amount it wouldn't really matter either way, I'd put it in the DB scheme though.
As it is a DC pension, as long as the value is below £30k there is no regulatory requirement to take financial advice. I'd therefore ask HL why they won't take the transfer if you do want to transfer it to your SIPP.

markinsouthsea

the reason I believe HL are saying I would need to take advice is because the AVC although a DC pension is attached to the DB scheme I have. I think that is the complication.

I am interested whether the offer they have made me is deemed as good value? I think I would prefer to have the £15k in my sipp so that I can use it alongside my other investments in there. However if being forced into taking advice, and the associated costs involved I may well decide to go along with the additional pension offer and take the 25% cash offered.

soulsaver

15200 - 3600 =11600 /306 = 38 years to repay - on the surface seems dire.
But attaching to the db scheme there may (must?) be widows benefit and/or index linking to take into account.

bolwin1

Depending on the size of the DB pension, if you are not taking the maximum tax free lump sum from your db pension, you may be able to withdraw the full AVC tax free when you retire. If you've not already considered this, it's worth checking with the scheme administrators.

I almost moved my AVCs into a sipp, but then realised I'd have been significantly worse off from a tax perspective.

Silvertabby

markinsouthsea wrote: »

I have a deferred pension with an old employer. Attached to it is an avc I paid into whilst employed there.

The value of the avc is now £15,200

They are offering me as part of my early retirement from October 31st, cash lump sum of £3637 with the remainder paying additional pension of £306 per year, alongside the dB pension I have accrued.

I am 57 years old single life option, 58 April next year and in good health.

Does this option seem a fair deal? The alternative is that I ask for a transfer of the avc to my Sipp, but I have been advised previously by hl that I would need to seek advice to do that as the value is over 10k despite the avc being a dc pension albeit linked to dB scheme.

My original and preferred option is to transfer it to my Sipp, however taking the cash sum plus the additional pension may work, I!!!8217;m just unsure whether the pension value they have given me is a good deal or not.

Am I right is saying that this £306 per year is an annuity from your AVC provider? It's not the norm to be able to use AVC funds to purchase additional main scheme benefits once you have left/deferred your pension.

If so, then it may be easier to transfer the whole of your AVC to a SIPP (if that's what you want to do) as it doesn't have the benefit of DB conversion.