Additional contribution option

OldBeanz

WYPBA5 said:

AVC's or APC's?
I have been allocated a lump sum by my employers which can be only added to my LGPS pension either via AVC's or APC's.
I'm nearly 63 with my NRD in 2024 and been paying into my LGPS since 2005 and MIGHT retire before my agreed NRD.
I presently have (i.e. am paying into a low risk) AVC's but don't have any APC's, so which would be best for me for the lump sum, AVC's or APC's?

Depends what you want to do. APC's will give you more pension and AVC's can usually be taken tax free. If you come out with the numbers and what you want to achieve then further information can be given.

LHW99

HIA said:

I think I've got it, every increase of £250 to my annual pension costs me £1650 up front so basically I've got to live 7 years post retirement to break even not allowing for the tax saving on the money invested. I also need to consider this additional pension will be taxed because I will be over the untaxed earning allowance. Also this extra pension will be reduced if I retire before 65. 15% annual return sounds good to me, except you don't get your capital back.

Don't forget the eventual pension would increase with inflation, possibly / probably at a higher rate than putting the money in a cash savings account.

Ryhs_Moggy

Dazed_and_C0nfused said:

There is no "pot" with defined benefit pension schemes.

Are you a basic, intermediate or higher rate payer?

What is an 'intermediate tax payer' please?  I have never heard of that term.  

Dazed_and_C0nfused

Dazed_and_C0nfused said:

There is no "pot" with defined benefit pension schemes.

Are you a basic, intermediate or higher rate payer?

What is an 'intermediate tax payer' please?  I have never heard of that term.  

It is the rate (21%) between basic and higher rate that Scottish taxpayers have to pay on earnings and pension income.

HIA

I didn't realise it was only a Scottish thing. I think I am best to save up and hold off buying extra pension until I have decided when to retire as it sounds like it would be difficult to do this more than once. 

WYPBA5

Hello OldBeanz,
Thank you for your reply. 
The lump sum would be £2543.00 and would be added to an existing AVC pot of just over ten thousand GBP.