To transfer into money purchace or AVC's

nonesocks

Hello,


I'm looking for some advice on transferring several private and ex company schemes into my current workplace scheme.


I work for Rolls-Royce and have a final salary scheme with a money purchase scheme running alongside, additionally I also pay AVC's through the work scheme.


I have been asked by Aviva who run both the MP scheme and handle the AVC's which of these I would like to transfer into ?


Can anybody tell me which I should choose and why, the combined transfer value is around 70k and I intend to draw down at retirement.


Many thanks

dunstonh

It is unusual for AVCs to accept transfers in. However, if they do you will need to compare terms.

Paying into an AVC alongside a money purchase scheme is also unusual (it happens but not as common nowadays as you may as well pay into the MPS).

I intend to draw down at retirement.

Seeing as hardly any AVCs and most occupational pensions don't support drawdown, maybe using an individual scheme would be the better option?

nonesocks

Thanks for the reply, the reason for wanting to transfer in is to get all my pensions in one place so its easier for me to see what's what.


Could you explain a little more about AVC's not supporting draw down, sorry not very pension smart! I'm trying to learn a bit.

dunstonh

Thanks for the reply, the reason for wanting to transfer in is to get all my pensions in one place so its easier for me to see what's what.

Then having the current workplace pension with the rest of the money purchase schemes in an individual pension may well be the best option. Then when you finish work, you move that last MPS into your individual one.

Could you explain a little more about AVC's not supporting draw down, sorry not very pension smart! I'm trying to learn a bit.

in 2006, rules were changed that meant employers no longer had to offer an AVC. AVCs were already a minority option and were starting to look dated against modern individual schemes in terms of cost and investment choice. So, there has been very little product development in AVCs and often the charges are higher than modern individual plans.

Drawdown is an option that has been available for nearly 20 years. However, it has always needed a pension that supported drawdown. AVCs rarely did and most will not receive software coding changes to allow drawdown as it's not cost-effective to do so.

xylophone

several private and ex company schemes into my current workplace scheme.

No individual scheme among these has safeguarded benefits valued in excess of £30,000?

https://www.reassure.co.uk/pensions/safeguarded-benefits/