AVC to existing work place pension or add to SIPP?

RoadToRiches

Best option please

Currently contributing 6% to work pension, employer double matching with 12% making total 18%

My payment is going out salary sacrificed.  I am not best happy about the option of funds I have in this standard life pension.  I did the best I could with the available options to me moving away from life styling funds to invest in 3 passive equity funds - emerging markets, overseas, and UK

Would I be better adding the AVC to work pension or putting it into my own SIPP? Employer is paying max.

MX5huggy

Salary Sacrifice you save the NI (12% for standard rate tax payers, 2% for higher). Could your own SIPP outperform the AVC by 12%, I doubt it. 

Albermarle

Also there is no guarantee that the funds you would pick in the SIPP , would actually outperform the SL ones, especially now you are not in their default or lifestyle funds.

dunstonh

Would I be better adding the AVC to work pension or putting it into my own SIPP? 

It is unlikely you have an AVC available if the workplace pension is defined contributions.  Whilst some older DC schemes did have an AVC, you typically only see them with DB schemes nowadays.    The reason being is that DC schemes allow you to choose how much you want to pay into them and there is no reason for an AVC to exist in that case.

My payment is going out salary sacrificed.  I am not best happy about the option of funds I have in this standard life pension.  I did the best I could with the available options to me moving away from life styling funds to invest in 3 passive equity funds - emerging markets, overseas, and UK

SL have been quite active with discounts with workplace pensions.  So, you often see SL schemes at around 0.3%-0.5% for the workplace.     They usually have a decent range of trackers too.  So, you should be able to achieve a pretty decent spread or multi-asset fund with most SL workplace pensions.    Your employer would have had to really gone heavy on restricting choice for there not to be a decent one.

RoadToRiches

I took AVC as a extra payment over and above the minimum needed to get the maximum employer benefit into the pension plan. 

So If I increased my payment in beyond 6% the employer would only ever pay in an extra 12% max with double matching

lisyloo

I agree that the nub of it is whether you other option will recoup the 12%.
that seems very unlikely.
I’d put it in the company scheme.

Alexland

Does your workplace scheme allow occasional partial transfers out while remaining a contributing member? Our SIPPs were built up from partial transfers out of workplace pensions which gives the best of both worlds - an NI saving on the contributions, more choice with potentially lower costs.

RoadToRiches

No they don’t allow partial transfers out, asked them about that previously:-)

tigerspill

I was in exactly he same situation.  While the funds weren't great - I still chose the benefits of salary sacrifice.  My AVCs also had a much reduced fee.
My wife didn't have the benefits of SS for her AVCs so she went the SIPP route.

Alexland

RoadToRiches said:

No they don’t allow partial transfers out, asked them about that previously:-)

Thats a shame. How long do you intend to work there as it might be worth just putting up with their choice of funds until you can do a full transfer out after you have left?

RoadToRiches

I have no immediate plans to leave, unless they offer me a good payoff.  Been there too long and get to work from home :-)