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Civil Service AVCs

Hi
Just wondering whether to put a little extra each month into CSAVCs as I begin to ramp up my pension provision. There doesn't appear to be salsac for this so is there any advantage over investing in my SIPP instead?
I haven't checked but I'm sure the charges will be fairly low, L&G now manage this option for the CS. My SIPP is with AJBell and I've managed it quite well for the year I've had it, I consider myself a novice enthusiastic investor :)
I'm 54, no particular plans to retire yet. 2 years in Alpha - bought £1k added pension last year and about to start EPA -2 to provide options at 65.

Thanks for reading

Comments

  • hugheskevi
    hugheskevi Posts: 4,596 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    There doesn't appear to be salsac for this so is there any advantage over investing in my SIPP instead?
    Not really.

    The main potential advantage is for lower fees due to bulk purchasing power of Civil Service - the annual charge for the default fund is 0.3%. Against that, there is limited investment choice if you want to go wider than the default fund and the default fund is quite conservative.

    There is the possible convenience of having contributions taken from net pay and not having to recover higher rate tax relief.
  • ArchaeoNeo
    ArchaeoNeo Posts: 16 Forumite
    Third Anniversary 10 Posts
    Many thanks:beer:
  • Clive_Woody
    Clive_Woody Posts: 5,943 Forumite
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    I've seen a few folk on here who are critical (or don't recommend) AVCs, but my employer allows me to make AVCs through salary sacrifice and adds "Employer National Insurance uplift of 13.80%", which to me seems like a very good deal for a higher rate tax payer.

    I also pay into the main pensions scheme and get the maximum employer contribution (me 7%, employer 10% = total 17%).

    Am I missing something here with AVCs?
    "We act as though comfort and luxury are the chief requirements of life, when all that we need to make us happy is something to be enthusiastic about” – Albert Einstein
  • dunstonh
    dunstonh Posts: 120,179 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I've seen a few folk on here who are critical (or don't recommend) AVCs, but my employer allows me to make AVCs through salary sacrifice and adds "Employer National Insurance uplift of 13.80%", which to me seems like a very good deal for a higher rate tax payer.

    The general statement is that AVCs are largely obsolete unless there is something special about them that makes them otherwise.

    AVCs no longer had to be offered after 2006. So, many providers pulled out and many left what they had in place in 2006. Since then we have had so many changes on the retail side of things and modern plans are very often much better.

    Many are still on 1% AMCs with no salary sacrifice, no employer enhancements and cannot be used in conjunction with the main scheme.
    Am I missing something here with AVCs?

    No. Yours is one of the minority. its all about the detail.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Clive_Woody
    Clive_Woody Posts: 5,943 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
    dunstonh wrote: »
    The general statement is that AVCs are largely obsolete unless there is something special about them that makes them otherwise.

    AVCs no longer had to be offered after 2006. So, many providers pulled out and many left what they had in place in 2006. Since then we have had so many changes on the retail side of things and modern plans are very often much better.

    Many are still on 1% AMCs with no salary sacrifice, no employer enhancements and cannot be used in conjunction with the main scheme.

    No. Yours is one of the minority. its all about the detail.
    Thanks once again for your input, as ever it is much appreciated and reassuring to know I am not entirely naive in my understanding of these things.
    "We act as though comfort and luxury are the chief requirements of life, when all that we need to make us happy is something to be enthusiastic about” – Albert Einstein
  • MrLeek
    MrLeek Posts: 28 Forumite
    I’d echo what has already been said. Fees are lower (platform fees are 0.17%) and I understand that this is a dramatic improvement from when Scottish Widows we’re running the scheme. But there’s only a handful of funds to choose from and I failed to find any decent information about any of them - aside from the 2 pages per fund that L&G provide.

    The big advantage is that’s it’s fairly simple to setup and the lack of choice may help some. I think higher tax payers do not have to do a tax return since everything is direct from salary. But the employer doesn’t pay in any extra into an AVC (as I understand it).

    So I’m sticking with my SIPP with Cavendish. That plus EPA-2 combined with Premium is a decent plan for me.
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