LGPS with AVCs - maximum lump sum

MX5huggy

k6chris said:

Silvertabby said:

In that case, don't fret about keeping your AVC under the tax free limit - the excess can be used to buy LGPS benefits at very favourable rates.

I looked at my options (a small LGPS pension with a relatively large AVC pot) and concluded that using it all to buy an annuity was a no brainer.  Was I wrong??

Did you take the tax free lump sum? Was the Annuity from LGPS or a 3rd Party?  

Does it matter now it’s happened? 

k6chris

MX5huggy said:

k6chris said:

Silvertabby said:

In that case, don't fret about keeping your AVC under the tax free limit - the excess can be used to buy LGPS benefits at very favourable rates.

I looked at my options (a small LGPS pension with a relatively large AVC pot) and concluded that using it all to buy an annuity was a no brainer.  Was I wrong??

Did you take the tax free lump sum? Was the Annuity from LGPS or a 3rd Party?  

Does it matter now it’s happened? 

Not happened yet, sorry my poor use of the past tense!  I am looking at the LGPS annuity option.

MX5huggy

Ok so probably take the max tax free from the AVC (because you’ll be paying tax on any annuity income). And yes LGPS probably best. You may get a a better offer from an Annuity company if you are an obese 40 a day smoker with Diabetes, because LGPS does not look at your individual circumstances just average life expectancy as I understand it. 

Silvertabby

k6chris said:

Silvertabby said:

In that case, don't fret about keeping your AVC under the tax free limit - the excess can be used to buy LGPS benefits at very favourable rates.

I looked at my options (a small LGPS pension with a relatively large AVC pot) and concluded that using it all to buy an annuity was a no brainer.  Was I wrong??

Tbere's no right or wrong answer - it's what right for you 

How old are you?  If you are nearer NRA than 55, then the LGPS added pension AVC annuity purchase factors are particularly good.  

Silvertabby

MX5huggy said:

Ok so probably take the max tax free from the AVC (because you’ll be paying tax on any annuity income). And yes LGPS probably best. You may get a a better offer from an Annuity company if you are an obese 40 a day smoker with Diabetes, because LGPS does not look at your individual circumstances just average life expectancy as I understand it. 

But would the third party impaired health annuity include a 10 year guarantee, the option of spouse's benefits, and - perhaps the big one - uncapped cost of living increases?

k6chris

Silvertabby said:

k6chris said:

Silvertabby said:

In that case, don't fret about keeping your AVC under the tax free limit - the excess can be used to buy LGPS benefits at very favourable rates.

I looked at my options (a small LGPS pension with a relatively large AVC pot) and concluded that using it all to buy an annuity was a no brainer.  Was I wrong??

Tbere's no right or wrong answer - it's what right for you 

How old are you?  If you are nearer NRA than 55, then the LGPS added pension AVC annuity purchase factors are particularly good.  

59.  No compelling reason to take or not take the pension early, I was simply struck by the excellent annuity rates when I was working out if taking it early was sensisble or viable.

Knowhere

Silvertabby said:

It's an annuity, but on way better terms than open market annuities.  The factors are age related, so , say, £10K of AVC funds will buy more pension at 65 than 55.

You can choose with or without spousal benefits, with not much of a reduction to your own pension if you choose 'with', and it's fully index linked.

I have been trying to find info regarding LGPS annuities but am struggling to find anything more than a mention - it must be available somewhere, have you got a link I can follow to be able to learn more please?

MX5huggy

Silvertabby said:

MX5huggy said:

Ok so probably take the max tax free from the AVC (because you’ll be paying tax on any annuity income). And yes LGPS probably best. You may get a a better offer from an Annuity company if you are an obese 40 a day smoker with Diabetes, because LGPS does not look at your individual circumstances just average life expectancy as I understand it. 

But would the third party impaired health annuity include a 10 year guarantee, the option of spouse's benefits, and - perhaps the big one - uncapped cost of living increases?

Probably not but it would be foolish not to at least find out what was on offer. 

Silvertabby

Knowhere said:

Silvertabby said:

It's an annuity, but on way better terms than open market annuities.  The factors are age related, so , say, £10K of AVC funds will buy more pension at 65 than 55.

You can choose with or without spousal benefits, with not much of a reduction to your own pension if you choose 'with', and it's fully index linked.

I have been trying to find info regarding LGPS annuities but am struggling to find anything more than a mention - it must be available somewhere, have you got a link I can follow to be able to learn more please?

Sorry - it's now called 'Buying a top up LGPS pension'.  Old habits die hard - thinking back, the use of the term 'annuity' did use to put the wind up/confuse some people.

AlanP_2

Are the LGPS "annuity" rates published somewhere? 

Would be interested to see them.