CSAVC's or LISA

strawb_shortcake

I am trying to put some extra money away for my retirement and hopefully be able to fund an earliest retirement than 68. Currently I'm 40.

Current salary is £43k not looking for promotion any time soon maybe 8 years away? But this would see an increase of £10k pa roughly

I'm a CS and pension is forecast to be over £30k pa at 65. I'm on track for a full state pension. 
Husband is also on track for a full state pension too, but not currently working and has no private pension in place. He doesn't think he'll see much of his old age so is reluctant to fund a pension whilst not working. Not sure what or how he will work in future but unlikely to be a high earner or full time. 

I have a LISA, but I don't think I can afford to fund it fully every year. I've started to add extra to it and hopefully will be able to add at least £2k a year. 

Should I focus on the LISA or maybe consider AVC's given I don't think funding  both are a viable option at the moment. I have 3 dependents, 1 at uni and another from next year. 
AVC's I'd obviously have to pay tax on in future so this seems to be the only downside. 

At 50 I should be able to up my investments with a minimal mortgage at that point and no dependent children. 

I had thought focus on LISA until 50 then transfer focus to AVC's? 

Thank you

Marcon

annabanana82 said:

I am trying to put some extra money away for my retirement and hopefully be able to fund an earliest retirement than 68. Currently I'm 40.

Current salary is £43k not looking for promotion any time soon maybe 8 years away? But this would see an increase of £10k pa roughly

I'm a CS and pension is forecast to be over £30k pa at 65. I'm on track for a full state pension. 

I have a LISA, but I don't think I can afford to fund it fully every year. I've started to add extra to it and hopefully will be able to add at least £2k a year. 

Should I focus on the LISA or maybe consider AVC's given I don't think funding  both are a viable option at the moment. I have 3 dependents, 1 at uni and another from next year. 
AVC's I'd obviously have to pay tax on in future so this seems to be the only downside. 

At 50 I should be able to up my investments with a minimal mortgage at that point and no dependent children. 

I had thought focus on LISA until 50 then transfer focus to AVC's? 

Thank you

Helpful reading: 
https://www.unbiased.co.uk/news/pensions/lifetime-isa-vs-pension-the-showdown
https://www.which.co.uk/money/pensions-and-retirement/personal-pensions/lifetime-isa-vs-pension-affl34p2r2uk

Have you considered a SIPP rather than CS AVCs, which would give you much more flexibility in terms of when and how you can access the cash?

annabanana82 said:

Husband is also on track for a full state pension too, but not currently working and has no private pension in place. He doesn't think he'll see much of his old age so is reluctant to fund a pension whilst not working. Not sure what or how he will work in future but unlikely to be a high earner or full time. 

If he pays into a pension he'll (currently) get an immediate 25% tax uplift added to his 'pot' even though he's not a tax payer, so that's surely worth considering? If he's worried about not living to a ripe old age, you might remind him that he can access the whole pot once he reaches the minimum legal age for accessing pensions (55, but likely to be at least 57 for him, assuming you are similar ages).

hugheskevi

Marcon said:

Have you considered a SIPP rather than CS AVCs, which would give you much more flexibility in terms of when and how you can access the cash?

CS AVCs are independent of the DB scheme and so can be accessed at a different time to the DB pension. The full range of pension flexibilities is available from Legal and General (the AVC provider) to withdraw the funds.

strawb_shortcake

Thank you both, I shall read through the link. 

I came very close to getting my Husband to sign up for a SIPP, and he changed his mind at the last minute before I pressed submit. 
I'm hoping when he does return to work, the pension or job comes with DIS, as he's unable to get life insurance then this is what will clinch it for him.