Cashing in AVC's pre retirement age

bour1012

My wife is taking early retirement at the end of this year - she has a couple of small AVC's which we told that if the total came to no more than £16,000 we could cash in the total amount albeit paying tax on 75% of the total.
On speaking to Zurich with whom one of the AVC's is held we are told that until she reaches 60 which is her retirement age she can only withdraw 25% and the rest has to purchase an annuity does anyone know if this is correct ?....(She won't be 60 until next January.)

Retired_I.F.A.

bour1012 wrote: »

My wife is taking early retirement at the end of this year - she has a couple of small AVC's which we told that if the total came to no more than £16,000 we could cash in the total amount albeit paying tax on 75% of the total.

One must be at least 60 to cash it in under the triviality rules.

On speaking to Zurich with whom one of the AVC's is held we are told that until she reaches 60 which is her retirement age she can only withdraw 25% and the rest has to purchase an annuity does anyone know if this is correct ?....(She won't be 60 until next January.)

correct as far as that contract goes but it can be transfered to a different contract which allows 25% tfc from 50 and the balance can provide annuity purchase, be left invested or allow income to be drawn whilst still invested.

dunstonh

In house AVCs are linked tentatively to occupational schemes. Under current rules, they are treated as occupational pensions because of the way they can be used "potentially" to alter occupational pension benefits.

FSAVCs no longer exist with all of those becoming perosnal pensions by default. Some providers still refer to them as FSAVCs but they are now treated as personal pensions and fall under personal pension rules.

The triviality rules apply to all pension planning and not just one particular plan. So, unless the occ scheme and all other personal pension arrangements are under 1% of the lifetime allowance, trivialty will not be available even if she is 60 or over.