AVC’s

Civvykev66

Hi, I am 54 , I have started a new job and  have joined the LGPS.  ( I was advised this is a good idea if I am going to work longer than 2 years). I would like to retire at 60 , is it worth paying additional voluntary contributions ? I already have a police pension that is paying as I completed 30 years .  

hyubh

Civvykev66 said:

Hi, I am 54 , I have started a new job and  have joined the LGPS.  ( I was advised this is a good idea if I am going to work longer than 2 years). I would like to retire at 60 , is it worth paying additional voluntary contributions ? I already have a police pension that is paying as I completed 30 years .  

With a full old-style police pension + a small LGPS one + the state pension to come, you must be pretty comfy for income when you stop working. So, from your point of view, I'd consider taking out an AVC not with respect to adding to your LGPS pension as such, but utilising LGPS rules to take the AVC as tax free cash when you draw your LGPS pension (within HMRC limits): https://www.lgpsmember.org/more/AVCoptions.php

OldBeanz

The LGPS is a must have as you can take most of it tax free. The calculation is (LGPS annual pension x 20 /3) as a tax free lump sum. Assuming your existing pension makes you a basic rate tax payer then anything over shooting that amount can either buy extra LGPS pension or can  be withdrawn at 15% tax rather than 20% tax. Fill your boots.

Silvertabby

Maximum tax free cash in OP's case (all post 2008 service, so no automatic lump sum) would be:

20 x annual pension plus 1 x AVC fund x 25%.

Or use the AVC fund to buy additional LGPS benefits.