APC with LGPS option

kremmen

As I am recently over pension age my APC additional payments have been stopped. I  am planning on working till 70 at the moment so asked what options I had to increase my pension as I have only been in the scheme for 5 years. I have been advised that I can pay £7k in for the year 2021/22 . I don't have that available so am considering £5k payment. Online forcast says this would likely increase my annual pension by £295. This seems to be 6% ish annually which isn't too shabby. 
However my my non financial mind says it would take 15 years to get that investment back and no one in my family has lived till that age. 
I am also single so there would be no partner pension to benefit.

I'm quite happy missing the deadline and not investing but I am pretty sure I must have missed something in my thinking so thought I would ask the hive mind

Thanks.

Paul

Silvertabby

Have you thought about AVCs?  Most people use these to maximise their tax free cash option without commuting their actual pension at the (pretty poor) rate of 1:12.

As long as you don't go daft, you should be able to enjoy the double whammy of tax relief in/tax free out.  Or if you are more interested in pension income, then you should be able to use your AVC fund to buy additional (but taxable) LGPS benefits.

kremmen

Thanks....Ahhh.. do apc's not attract tax relief?

Silvertabby

kremmen said:

Thanks....Ahhh.. do apc's not attract tax relief?

Yes, on the way in, but taxable on the way out.

kremmen

That's definitely shifted my viewpoint from not bothering to investigating AVC's. I appreciate it. Now I just need to see if they take lump sums or only regular payments.. there are three providers I need to see who pays the fees. 😁. Ok.. only two providers now prudential and standard Life. Standard life has got some bad press recently about being slow. Google is my friend 

teachergirl

I don't really know much about AVC's other than I and my late husband had them with Prudential. I would say avoid the prudential at ALL COSTS. If google is your friend check them out. I am having so many problems getting my money. After you wait the customery 30 minutes to speak to a human, each advisor says something totally different to the last or doesn't know. You cannot speak to a manager or supervisor, and all communication is by letter!!!!!!! Horrendous company

kremmen

I will definitely avoid prudential but apparently standard life is no longer taking avc's 🤨. I'm on to my pension provider to find out if there's an alternative but I think I'm technically stuffed. 

EP456

I had no problems with Prudential.  When I retired my AVC lump sum was paid out on time.

Retireinten

I will be going down the AVC route eventually once all other ISAs and private pensions are topped up enough to fund the gap between finishing work and accessing my LGPS. This is to maximise the tax free lump sum, we want a lump sum cushion in retirement and saving via the AVC scheme is a very tax efficient way to achieve this. 

Hopefully the problems with Prudential will be sorted by then🤞

OldBeanz

kremmen said:

I will definitely avoid prudential but apparently standard life is no longer taking avc's 🤨. I'm on to my pension provider to find out if there's an alternative but I think I'm technically stuffed. 

Prudential get there in the end and the wife has had £1300 out of them (she normally only pays in a couple of £k pa).
Having said that after 20 months we still do not know who the Pru write to to confirm the change. I have asked the LA, the Pension Ombudsman is intervening but to no avail.
While a shambles I am sure they will work things out eventually and in the meantime find it easier to pay out rather than resolve issues properly.

kremmen

Thanks for all the advice I am plumping for an AVC from standard Life. Probably only going to be be putting that money in for 3 years and I'm not expecting great returns but they are suggesting that if you are near to retirement it would be wise to consider a money market fund or funds. 

Now I've got to do is work out which of the hundreds of fans information they've sent me fix this 🤣.

I think they might be the ones marked money market instruments but I will ring them up. I know I've got to make the decision myself but it would be nice if there were clearly highlighted in their documentation. Sigh😁