LGPS AVC question

Durban

I wonder if anyone could assist please.

I currently pay into Prudential AVC’s with the intention of taking the whole lot as a lump sum when I retire, which I am able to do under the LGPS current rules. However , I still have around 15 years to go. The AVC calculator shows that I may have more in there than is permitted regarding the lump sum.

My question is , would I be able to transfer the balance after taking the maximum permitted lump sum to a drawdown account? I can see the options of buying extra pension , annuity etc but cannot see anything on the site about transferring any balance out to a drawdown account.

Many thanks

Brynsam

No, because by then your pension would be classed as being in payment and you couldn't transfer.

You could consider stopping contributions to your AVC when you reach the point at which it is likely to equal the maximum lump sum and then pay what would have been AVC contributions direct to a SIPP instead.

Silvertabby

Yes. Currently, one of the AVC residual fund options is the transfer out to another scheme.

However, it can be a faff of epic proportions. As Brynsam says, a transfer can't take place once a pension has been brought into payment - so payment of your LGPS benefits (including the AVC tax free cash) would be put on hold until the Pru confirm that the transfer has taken place. Bearing in mind that some gaining schemes could insist that you obtain a positive recommendation from a pensions transfer specialist IFA (in view of the LGPS pension purchase option that you would be giving up) this could take months.

Durban

Thank you both , that is very helpful