Tax implications of AVCs

lakelady

I am not sure where is the best place to ask this question, so have also posted this in the tax forum. If this is considered bad form, please let me know?

I will earn approx £6k this tax year, roughly half from an employer, and half from a pension which kicked in in January. Next tax year, I will earn about £12500 from the pension, and potentially (but not definitely) another £3k or so from employment.

I have approx £18k in AVCs, which I can claim now.

Should I claim it now, or tax wise, would it be better to wait until after 5 April? Also, is it possible to work out how much of the £18 I will keep, please? The company cannot advise, as they don't have access to my tax records, although the situation is exactly as above.

Thanks in advance.

dunstonh

Should I claim it now, or tax wise, would it be better to wait until after 5 April?

What do you mean by claiming it? claim isnt a word usually used with pensions. Do you mean drawing an income or taking lump sums or a combination or phased over a period?
It is a conventional AVC linked to the main scheme or a hybrid plan that enhances the main scheme? Or is it not an AVC? (a lot of people use the term AVC incorrectly)

Do you even need the money now?

The company cannot advise, as they don't have access to my tax records, although the situation is exactly as above.

They cant advise as advice is a regulated activity.

lakelady

By 'claiming' it, I just mean getting access to it. I want to take it as a lump sum, as it would not give much by way of a monthly pension.

It is a Prudential AVC, which I paid into to enhance a pension from TPS.

I know that the Pru can't advise, which is why I am asking on here

I don't 'need' the money, but feel that it would be better to have a reasonable lump sum, rather than a tiny additional pension.

dunstonh

I know that the Pru can't advise, which is why I am asking on here

We cant advise here either. Just opinion and comment only.

I don't 'need' the money, but feel that it would be better to have a reasonable lump sum, rather than a tiny additional pension.

The Pru AVC supports UFPLS. So, you never need to draw an income from it. You can use it draw ad-hoc lump sums whenever you like.

The general rule of thumb is to leave money in a pension unless there is a justified reason otherwise.

It may well be worth drawing enough to use up your personal allowance in this tax year but for the rest, if not needed, then leave it there and draw ad-hoc sums when you do actually need it.

lakelady

Thank you