LGPS advice

Loan_soldier

Hi all,

I am just about to start a new post with the council and will be contributing to LGPS.

I have build up approx £6k in my pension in my previous post which I intend to transfer to a SIPP.

This is where I am unsure how to proceed.

Should I continue to contribute to my SIPP and build up money to retire early or do I make AVC towards my LGPS?

I'm leaning towards the SIPP as I can cash this in whenever allowing my to cover the period of time until I can claim my LGPS.

What is the benefit of AVC within the LGPS?

Thanks in advance,

JoeCrystal

There is another option you seems have not considered. It is worth asking what the transfer value of £6,000 buy in term of benefits in LGPS as well if your new employer permits it.

Loan_soldier

I will certainly look into that however I have a feeling it is not possible as I have had a preliminary look of the t&c's.

I'm concerned that my only pension provision would only be accessible around 68 unless I am prepared to take a significant drop in value for example to retire at 55 I'm looking at 52% reduction.

xylophone

https://forums.moneysavingexpert.com/discussion/comment/76042321#Comment_76042321

Loan_soldier

I have read that thread but I don't think it is relevant to my question.

I am planning on paying an additional £100 towards my pension. Should I contribute this to a SIPP or to my LGPS as an AVC?

I can't see a benefit to adding it to the LGPS, am I missing something?

xylophone

I have read that thread but I don't think it is relevant to my question.

Did you read the link in the thread

https://www.lgpsmember.org/arm/already-member-extra.php and the FAQ

https://www.lgpsmember.org/more/AVCoptions.php to which it links?

You then need to decide whether the AVC options (which include transferring out to a SIPP/PP etc) suit your purpose or whether you would prefer to transfer your existing pension to another arrangement and continue to contribute as you outline in your first post?

https://www.pru.co.uk/rz/localgov/ may be worth a look?

Lummoxley

Currently the main advantage of LGPS AVC's is they are treated as part of your main LGPS. Effectively this means that you could take all or the majority of the AVC tax free versus 25% in a SIPP.

The caveat is that you have to take your main LGPS and AVC at the same time. Personally for me, given my age, it's a no-brainer so I'm piling contributions in while I can.

Happier_Me

I would check if your AVC's are part of a salary sacrifice scheme. This means you will save NI as well as tax on any contributions made to the scheme, so that would make AVCs more attractive than a SIPP. The main benefit of LGPS AVC's is access to a higher tax free cash lump sum when you take your LGPS pension. But you should also be able to transfer your AVC pot to another provider to drawdown before you take your LGPS, just like a SIPP.

So if you can relatively easily transfer your pension AND you can make NI savings I'd go for the AVC's. If not, I'd probably save into a SIPP.

I'm looking to do a bit of everything to secure my annual retirement income, as follows:

- LGPS: Long standing member looking to take this from 60
- ISAs: For a cash lump sum at 55 and to fund ages 55 - 57
Pension: To fund ages 57 - 60
AVC's: To boost my lump sum, will be used to supplement annual income
by £3-£4k a year from 60 to 75 ish. Without this I'd need more In
the other pots, all of which would be subject to tax when I put it in
or take it out.